Carswell Electronics adopted the dollar-value LIFO method on January 1, 2016, wh

Question

Carswell Electronics adopted the dollar-value LIFO method on January 1, 2016, when the inventory value of its one inventory pool was $870,000. The company decided to use an external index, the Consumer Price Index (CPI), to adjust for changes in the cost level. On January 1, 2016, the CPI was 230. On December 31, 2016, inventory valued at year-end cost was $1,045,000 and the CPI was 253. Required: Calculate the inventory value at the end of 2016 using the dollar-value LIFO method.

Inventory Layers Converted to Base Year Cost Inventory Layers Converted to Cost Ending Inventory DVL Cost Date Inventory at Year-End Cost Year-End Cost Index Inventory Layers at Bse Year Cost Inventory Layers at Base Year Cost Year End Cost Index Inventory Layers Converted to Cost 1/1/2016 ? ? ? Base ? ? ? ? 12/31/2016 ? ? ? Base ? ? ? ? 2016 ? ? ? ?

Explanation / Answer

Answer:

Inventory Layers Converted to Base Year Cost Inventory Layers Converted to Cost Date Inventory at Year-End Cost Year-End Cost Index Inventory Layers at Bse Year Cost Inventory Layers at Base Year Cost Year End Cost Index Inventory Layers Converted to Cost Ending Inventory DVL Cost 1/1/2016 870000 2.3 378260.8696 Base 378260.8696 2.3 870000 870000 12/31/2016 1045000 2.53 413043.4783 Base 378260.8696 2.3 870000 2016 34782.6087 2.53 88000 958000

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