On January 1, 2013, the Taylor Company adopted the dollar-value LIFO method. The
ID: 2705832 • 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 $420,000. Inventory data for 2013 through 2015 are as follows:
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 $420,000. Inventory data for 2013 through 2015 are as follows:
the Taylor Company adopted the dollar-value LIFO method. The inventory value for its one inventory pool on this date was $420,000. Inventory data for 2013 through 2015 are as follows:Explanation / Answer
4,20,000 is the base.
12/31/13 >> (4,48,000/1.02) = 4,40,000 >> 4,20,000 (base )
20,000 (2013)
20,000 * Cost Index = 20,000 * 1.02 = 20,400
Hence total = 4,20,200 + 20,400 = 4,40,400 (2013)
12/31/14 >> (5,05,050/1.11) = 4,55,000 >> 4,20,000 (base)
20,000 (2013)
15,000 (2014)
20,000 * 1.02 = 20,400
15,000 * 1.11 = 16,650
Hence, 4,40,400 + 16,650 = 4,57,050 (2014)
12/31/15 >> (5,34,000/1.20) = 4,45,000 >> 4,20,000 (base)
20,000(2013)
5,000(2015)
20,000 * 1.02 = 20,400
5000*1.2 = 6,000
Hence, 4,40,400 + 6000 = 4,46,400 (2015)
Hence ending inventory at the end of 2013 is 4,40,400
2014 is 4,57,050
2015 is 4,46,400
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