Year Ended Inventory Cost Index December 31 Year-End Costs (Relative to Base Yea
ID: 2388760 • Letter: Y
Question
Year Ended
Inventory
Cost Index
December 31
Year-End Costs
(Relative to Base Year)
2011
$
350,000
1.02
2012
360,000
1.06
2013
419,000
1.07
2014
438,000
1.10
Required:
Calculate inventory
amounts at the end of each year. (Round your intermediate calculations and final answers to the
nearest dollar amount. Omit the "$" sign in your response.)
Ending
Date
Inventory
12/31/11
$
12/31/12
$
12/31/13
$
12/31/14
$
On January 1, 2011,Avondale Lumber adopted the dollar-value LIFO inventory method. The inventory
value for its one inventory pool on this date was $277,000. An internally
generated cost index is used to convert ending inventory to base year.
Year-end inventories at year-end costs and cost indexes for its one inventory
pool were as follows:
Explanation / Answer
12/31/11 - Inventory at base year cost = (359,000/1.02) = 351,961 ____ Inventory amount(Dollar Value LIFO) = 262,000 + 1.02(351,961 - 262,000) = 353,760 ____ 12/31/12 - Inventory at base year cost = (369,000/1.06) = 348,113 [decreased from previous base year's cost] ____ Inventory amount(Dollar Value LIFO) = 262,000 + 1.02[(351,961 - 262,000)+(348,113 - 351,961)] = 349,835 ____ 12/31/13 - Inventory at base year cost = (407,000/1.07) = 380,374 ____ Inventory amount(Dollar Value LIFO) = 349,835 + 1.07(380,374 - 348,113) = 384,354 ____ 12/31/14 - Inventory at base year cost = (442,000/1.10) = 401,818 ____ Inventory amount(Dollar Value LIFO) = 384,354 + 1.10(401,818 - 380,374) = 407,942
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.