At the beginning of 2018, a company adopts the dollar-value LIFO inventory metho

Question

At the beginning of 2018, a company adopts the dollar-value LIFO inventory method for its one inventory pool. The pool's value on that date was $1,160,000. The 2018 ending inventory valued at year-end costs was $1,530,000 and the year-end cost index was 1.02 Complete the below table to calculate the inventory value at the end of 2018 using the dollar-value LIFO method Inventory DVL Cost Inventory Layers converted to Base Year Cost Inventory Layers converted to Cost Inventory at year-end cost Inventory Layers at Base Year Cost Inventory Layers at Base Year Cost Inventory Layers Converted to Cost Year-end cost index Year-end cost index Date Base Base 2018 01/01/2018 12/31/2018

Explanation / Answer

Date 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 Inventory DVL Cost $ $ $ $ $ 01/01/2018 1,160,000 1 1,160,000 1,160,000 1.00 1,160,000 12/31/2018 1,530,000 1.02 1,500,000 340,000 1.02 346,800 $ 1,506,800 $ 1,506,800

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