On January 1, 2013, Avondale Lumber adopted the dollar-value LIFO inventory meth
ID: 2448879 • Letter: O
Question
On January 1, 2013, Avondale Lumber adopted the dollar-value LIFO inventory method. The inventory value for its one inventory pool on this date was $350,000. 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: Year Ended Inventory Cost Index December 31 Year-End Costs (Relative to Base Year) 2013 $ 438,780 1.03 2014 451,540 1.07 2015 508,680 1.08 2016 548,895 1.11 Required: Calculate inventory amounts at the end of each year.
Explanation / Answer
Solution:
(A). 2013
Ending Inventory:
Begining Inventory = 3,50,000
Less: Year end nventory - 4,38,780
= 88,780
(B). 2014
Begining Inventory = 3,50,000
Less:Year end Inventory - 4,51,540
= 1,91,540
(C). 2015
Begining Inventory = 3,50,000
Less: Year end Inventory - 5,48,895
= 1,98,895
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