On January 1, 2016, the National Furniture Company adopted the dollar-value LIFO
ID: 2567985 • Letter: O
Question
On January 1, 2016, the National Furniture Company adopted the dollar-value LIFO method of computing inventory. An internal cost index is used to convert ending inventory to base year. Inventory on January 1 was $204,000. Year-end inventories at year-end costs and cost indexes for its one inventory pool were as follows:
Required:
Compute inventory amounts at the end of each year.
On January 1, 2016, the National Furniture Company adopted the dollar-value LIFO method of computing inventory. An internal cost index is used to convert ending inventory to base year. Inventory on January 1 was $204,000. Year-end inventories at year-end costs and cost indexes for its one inventory pool were as follows:
Explanation / Answer
Particulars
Ending Inventory at Base year Cost
Inventory Layers at Base Year Cost
Inventory Layers Converted to Costs
Ending Dollar Value
1st January, 2016
204000/1
204000
204000 (Base)
204000*1
204000
31st December, 2016
267840/1.08
248000
204000 (Base)
204000*1
204000
251520
44000(2016)
44000*1.08
47520
31st December, 2017
310240/1.12
277000
204000 (Base)
204000*1
204000
284000
44000(2016)
44000*1.08
47520
29000(2017)
29000*1.12
32480
31st December, 2018
312800/1.15
272000
204000 (Base)
204000*1
204000
278400
44000(2016)
44000*1.08
47520
24000(2017)
24000*1.12
26880
Particulars
Ending Inventory at Base year Cost
Inventory Layers at Base Year Cost
Inventory Layers Converted to Costs
Ending Dollar Value
1st January, 2016
204000/1
204000
204000 (Base)
204000*1
204000
31st December, 2016
267840/1.08
248000
204000 (Base)
204000*1
204000
251520
44000(2016)
44000*1.08
47520
31st December, 2017
310240/1.12
277000
204000 (Base)
204000*1
204000
284000
44000(2016)
44000*1.08
47520
29000(2017)
29000*1.12
32480
31st December, 2018
312800/1.15
272000
204000 (Base)
204000*1
204000
278400
44000(2016)
44000*1.08
47520
24000(2017)
24000*1.12
26880
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.