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Exercise 8-22 Dollar-value LIFO (LO8-8] On January 1, 2013, the Haskins Company adopted the dollar-value LIFO method for its one inventory pool. The pool's value on this date was $810,000. The 2013 and 2014 ending inventory valued at year-end costs were $845,000 and $924,000, respectively. The appropriate cost indexes are 1.04 for 2013 and 1.05 for 2014 Required Complete the below table to calculate the inventory value at the end of 2013 and 2014 using the dollar-value LIFO method Ending Inventory DVL Cost Inventory Layers converted to Base Year Cost Inventory Layers converted to Cost Year-end cost index Inventory Layers at Base Year Cost Inventory Layers at Base Year Cost Inventory Year-end Inventory at year-end cost Date cost index at year end cost $ 810,000 00 $ 845,000 ÷ 1,04 = $ 810,000! Base $ 8100001 X 100 = $ 812,500| Base $ 810.000| x 01/01/2013 $ 810,0001$ 810,000 12/31/2013 2013 x 1.04 12/31/2014 924,0001.05 2013 2014

Explanation / Answer

Dollar value method :

Date inventory at year end cost year end cost index inventory layers at base year cost inventory at year end cost year end cost index = inventory layers at base year cost 01/01/2013 81000 / 1.00 = 810000 Base 810000 * 1.00 = 810000 810000 12/31/2013 845000 / 1.04 = 812500 Base 810000 * 1.00 = 810000 2013 2500 * 1.04 = 2600 812600 12/31/2014 924000 / 1.05 = 880000 Base 810000 * 1.00 = 810000 2013 2500 * 1.04 = 2600 2014 67500 * 1.05 = 70875 883475

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