Carswell Electronics adopted the dollar-value LIFO method on January 1, 2016, wh
ID: 2425158 • Letter: C
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
Date
Inventory Layers Converted to Base Year Cost
Inventory Layers Converted to Cost
Ending Inventory DVL Cost
Inventory at Year-End Cost
Year-End Cost Index
Inventory Layers at Base Year Cost
Inventory Layers at Base Year Cost
Year End Cost Index
Inventory Layers Converted to Cost
01-01-2016
$ 650,000.00
230/230
$ 650,000.00
Base
$ 650,000.00
230/230
$ 650,000.00
$ 650,000.00
12/31/2016
$ 1,045,000.00
230/253
$ 950,000.00
Base
$ 650,000.00
230/230
$ 650,000.00
2016
$ 300,000.00
253/230
$ 330,000.00
$ 980,000.00
Date
Inventory Layers Converted to Base Year Cost
Inventory Layers Converted to Cost
Ending Inventory DVL Cost
Inventory at Year-End Cost
Year-End Cost Index
Inventory Layers at Base Year Cost
Inventory Layers at Base Year Cost
Year End Cost Index
Inventory Layers Converted to Cost
01-01-2016
$ 650,000.00
230/230
$ 650,000.00
Base
$ 650,000.00
230/230
$ 650,000.00
$ 650,000.00
12/31/2016
$ 1,045,000.00
230/253
$ 950,000.00
Base
$ 650,000.00
230/230
$ 650,000.00
2016
$ 300,000.00
253/230
$ 330,000.00
$ 980,000.00
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