Windsor Corporation adopted the dollar-value LIFO retail inventory method on Jan

Question

Windsor Corporation adopted the dollar-value LIFO retail inventory method on January 1, 2016. At that time the inventory had a cost of $55,000 and a retail price of $100,000. The following information is available.

Year-End
Inventory at Retail

Current Year
Cost—Retail %

Year End
Price Index

The price index at January 1, 2016, is 100.

Compute the ending inventory at December 31 of the years 2016–2019. (Round ratios for computational purposes to 0 decimal places, e.g. 78% and final answers to 0 decimal places, e.g. 28,987.)

2016

2017

2018

2019

Year-End
Inventory at Retail

Current Year
Cost—Retail %

Year End
Price Index

2016 $119,780 58% 106 2017 133,200 61% 111 2018 122,960 62% 116 2019 177,320 59% 124

Explanation / Answer

Ending Inventory Amount 2016 65540 2017 73200 2018 65720 2019 84370 Multiply the retail price with the cost- retail percentage. Multiply with 100 such value and divide the same with the year end index. So that we can get the values as stated above in the table. Example: 119780 x 58% x 100/106 = 65540

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