Compute the cost of the inventory destroyed in the fire.

Dollar-Value LIFO Retail and Fire Loss – The Golden Company adopted the dollar-value retail LIFO method on January 1, 2007. The following information relates to the following 2 years:

2007

2008 (through September 7)

Cost

Retail

Cost

Retail

Inventory, January 1

$40,000

$90,000

Purchases

$160,000

$350,000

Purchases

100,000

210,000

Sales

280,000

Sales

200,000

Net markups

40,000

Net markups

20,000

Net markdowns

70,000

Net markdowns

40,000

In addition the following price indexes are available:

Jan-07

100

Dec-07

106

Sep-08

110

On September 8, 2008 a fire destroyed the inventory except for goods in transit (properly recorded), FOB shipping point, at a cost of $8,000, and undamaged goods salvaged from the fire, which had a retail value of $10,000.

Required

Compute the cost of the inventory destroyed in the fire.

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