21 POINTS EACH 42 POINTS MAX 2. On January 1,2014 Christopher Company adopted th

Question

21 POINTS EACH 42 POINTS MAX 2. On January 1,2014 Christopher Company adopted the dollar-value LIFO method of inventory costing The Company's ending inventory records appear as follows: Year Current Cost Index $10,000 11,845 12,096 13,090 2014 2015 2016 2017 100 103 108 110 NOTE: Be sure to Compute the Layers in D.V. LIFO Ending Inventory Required: Compute the ending inventory for 2014, 2015,2016 and 2017 using the dollar value carest dollar LIFO method roundedt Ending Increase (Decrease) InventoryBase Year Inventory (Decrease) Relevant Date | At |x)Cost Index At at X Cost IndexRelevant Inventory Current Current Base-Year Base-Year Base-Year Costs Cost Index Costs Costs Current at Costs LIFO Layers in D.V. LIFO Ending Inventory Cost Index $10,000 (S 10.000 @ 100) Hs10,000 S10 000 = 12/31/14 10,000 12/31/15 11,845X 12/31/16 12,096 X 12/31/17 13,090 x

Explanation / Answer

Base year Index

current year cost index

1200*103/100

700*110/100

1236

770

10000

1236

770

Date ending inventory at current cost *

Base year Index

current year cost index

= Inventory at base year cost Increase/(decrease) in cost * Relevant year cost index = Increase/(decrease)in relevant year cost index Ending inventory at LIFO LIFO ending inventory 12/31/14 10000 10000 10000 10000 12/31/15 11845 100/103 11500 1500 [ 11500-10000] 103/100 1545 10000+1545= 11545 10000 1545 12/31/16 12096 100/108 11200 1200     [from 2015 ][11200-10000] 103/100 1236     10000+1236=1236 10000 1236 12/31/17 13090 100/110 11900 1900    [11900-10000]

1200*103/100

700*110/100

1236

770

10000+1236+770=12006

10000

1236

770

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