Dollar-Value LIFO Acute Company manufactures a single product. On December 31, 2

Question

Dollar-Value LIFO Acute Company manufactures a single product. On December 31, 2015, Acute adopted the dollar-value LIFO inventory method. It computes the inventory on that date using the dollar-value LIFO inventory method as $300,000. Inventory data for succeading years are as follows: Year Ended Inventory at Respective Relevant Price Index December 31,Y 2016 2017 2018 Required: Year-End Prices(Base Year 2015) $363,000 420,000 430,000 1.10 1.20 1.25 Compute the inventory amounts at December 31, 2016, 2017, and 2018 using the dollar-value LIFO inventory method for each year. Do not round your intermediate calculations. If required

Explanation / Answer

ans) Computation of inventory amounts:

Ending inventory at base At base year prices Price index Ending inventory value year price

Dec, 31, 2016 363000 X 1.1= 300,000 X 1.00 = 300,000

399300 99300 x 1.1 = 109230

409230

Dec,31,2017 420,000 x 1.2= 300,000 X 1 = 300,000

504000 99300 X 1.1 = 109230

104700 X 1.2 = 125640

534870

Dec,31, 2018 430,000 X 1.25 = 300,000 x 1 = 300,000

537500 99300 X 1.1 = 109230

104700 X 1.2 = 125640

33500 X 1.25 = 41875

576745

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