On January 1, 2013, the Taylor Company adopted the dollar-value LIFO method. The
ID: 2421420 • Letter: O
Question
On January 1, 2013, the Taylor Company adopted the dollar-value LIFO method. The inventory value for its one inventory pool on this date was $310,000. Inventory data for 2013 through 2015 are as follows:
Date
Ending Inventory at Year-End Costs
Cost Index
12/31/13
$339,900
1.03
12/31/14
$382,950
1.11
12/31/15
$398,650
1.19
Required:
Calculate Taylor’s ending inventory for 2013, 2014, and 2015.
Ending
Date
Inventory
12/31/13
12/31/14
12/31/15
Date
Ending Inventory at Year-End Costs
Cost Index
12/31/13
$339,900
1.03
12/31/14
$382,950
1.11
12/31/15
$398,650
1.19
Explanation / Answer
Calculation of Taylor’s ending inventory for 2013, 2014, and 2015.are as follow
Cost 1/1/13 $410,000 = $310,000 $310,000 (base) $310,000 × 1.00 = $3100,000 $310,000 1.00
12/31/13 $339,900 = $330,000 $310,000 (base) $310,000 × 1.00 = $310,000 1.03 20,000 (2013) 20,000 × 1.03 = 20,600= $330,000
12/31/14 $382,950 = $345,000 $310,000 (base) $310,000 × 1.00 = $310,000 1.10 20,000 (2013) 20,000 × 1.03 = 20,600 15,000 (2014) 15,000 × 1.10 = 16,500 =$345,000
12/31/15 $398,650 = $335,000 $310,000 (base) $310,000 × 1.00 = $310,000 1.23 20,000 (2013) 20,000 × 1.03 = 20,600 5,000 (2014) 5,000 × 1.10 = 5,500 $335,000
Year Value 12/31/13 330,000 12/31/14 345,000 12/31/15 335.000Related Questions
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