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LO. 3,6 In 2013, Gail changed from the lower of cost or market FIFO method to the LIFO inventory method. The ending inventory for 2012 was computed as follows:
Item FIFO Cost Replacement Cost Lower of cost or Market
A $26,000 $15,000 $15,000
B 52,000 55,000 52,000
c 30,000 7,000 7,000
$74,000

Item C was damaged goods, and the replacement cost used was actually the estimated selling price of the goods. Te actual cost to replace item C was $32,000.
A). What is the correct beginning inventory for 2013 under the LIFO method?
B). What immediate tax consequences (if any) will result from the witch to LIFO?

 

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