Connie Chung Corporation adopted the dollar-value LIFO retail inventory method o

Question

Connie Chung Corporation adopted the dollar-value LIFO retail inventory method on January 1, 2016. At that time the inventory had a cost of $54,000 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 $118,720 57% 106 2017 138,750 60% 111 2018 125,350 61% 115 2019 162,500 58% 125

Explanation / Answer

2016 Restate the base year inventory to retail ($118,720 /1.06) 112000 Layers 1 : $100,000*1.00*(54000/100,000) 54000 Layers 2 : $12000*1.06*57% 7250.4 Ending inventory for 2016 61250.4 2017 Restate the base year inventory to retail ($138750 /1.11) 125000 Layers 1 : $100,000*1.00*(54000/100,000) 54000 Layers 2 : $12000*1.06*57% 7250.4 Layers 3 : $13000*1.11*60% 8658 Ending inventory for 2017 69908.4 2018 Restate the base year inventory to retail ($125,350 /1.15) 109000 Layers 1 : $100,000*1.00*(54000/100,000) 54000 Layers 2 : $9000*1.06*57% 5437.8 Ending inventory for 2018 59437.8 2019 Restate the base year inventory to retail ($162,500 /1.25) 130000 Layers 1 : $100,000*1.00*(54000/100,000) 54000 Layers 2 : $9000*1.06*57% 5437.8 Layers 3 : $21000*1.25*58% 15225 Ending inventory for 2019 74662.8

2016 2017 2018 2019 Ending inventory 61250.4 69908.4 59437.8 74662.8

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.