/ Problem\' #5 (9 %) Dollar Value l\'IFC) Archer Company manufactures one value
ID: 2588412 • Letter: #
Question
/ Problem' #5 (9 %) Dollar Value l'IFC) Archer Company manufactures one value LIFO inventory method. The inventory on that date using the dollar-value product. On December 31, 2013, Archer adopted the dollar- LIFO inventory method was $450,000. Inventory data are as follows: Year 2014 2015 Inventory at year-end prices $630,000 920,000 950,000 Price index (base year 2009) 1.05 1.15 1.25 2016 Instructions Compute the inventory at December 31, 2014, 2015, and 2016 using the dollar-value LIFO terisk) nethod for each year, and note any years in which there was LIFO liquidation (circle oExplanation / Answer
Solution:
December 31, 2013 : 607,500
December 31, 2014 : 837,500
December 31, 2015 : 791,500
Working:
Ending inventory at base - Year Price
Layers at base - Year Price
Price index
Ending Inventory
At 12/31/2014
630000/1.05 = 600,000
450,000
1
450,000
150,000
1.05
157,500
607,500
At 12/31/2015
920000/1.15 = 800,000
450,000
1
450,000
150,000
1.05
157,500
200,000
1.15
230,000
837,500
At 12/31/2016
950000/1.25 = 760,000
450,000
1
450,000
150,000
1.05
157,500
160,000
1.15
184,000
791,500
Ending inventory at base - Year Price
Layers at base - Year Price
Price index
Ending Inventory
At 12/31/2014
630000/1.05 = 600,000
450,000
1
450,000
150,000
1.05
157,500
607,500
At 12/31/2015
920000/1.15 = 800,000
450,000
1
450,000
150,000
1.05
157,500
200,000
1.15
230,000
837,500
At 12/31/2016
950000/1.25 = 760,000
450,000
1
450,000
150,000
1.05
157,500
160,000
1.15
184,000
791,500
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