On January 1, 2013, the Dell Company adopted the dollar-value LIFO method for it

Question

On January 1, 2013, the Dell Company adopted the dollar-value LIFO method for its one inventory pool. The pool's value on this date was $452,000. The later years' ending inventory valued at year-end costs and the appropriate cost indexes are shown in the following table. Calculate the inventory value at the end of 2013, 2014, 2015, and 2016 using the dollar-value LIFO method. Cost Yr-End Index Cost Dollar Value LIFC 452,000 1/1/2013 12/31/2013 1.01 598,600 12/31/2014 1.05 71.2 12/31/2015 12/31/20161.06 812,000 1.08 726,000

Explanation / Answer

Ans. Calculation of cost of inventory using cost index

Year             Cost index       yr-End cost             Dollar value LIFO

01/01/2013           1                   452000                    452000

12/31/2013           1.01              598600                    604586

12/31/2014           1.05              571250                    599812

12/31/2015           1.08              726000                   784080

12/31/2016           1.06              812000                   860720

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