At the beginning of 2018, Quentin and Kopps (Q&K;) adopted the dollar-value LIFO

Question

At the beginning of 2018, Quentin and Kopps (Q&K;) adopted the dollar-value LIFO (DVL) inventory method. On that date the value of its one inventory pool was $81,000. The company uses an internally generated cost index to convert ending inventory to base year Required: Determine the missing amounts in the inventory data for 2018 through 2021 Ending Inventory at Year-End costs Ending Inventory at Base-Year Costs Ending Inventory at DVL cost Year Ended December 31 2018 2019 2020 2021 95,550 $ 134,520 146,640 S Cost Index 1.05 1.14 91,000 122,200 1.25 S 130,820

Explanation / Answer

Ending Inventory at DVL cost in 2018 = 81,000

Internally generated Cost Index= 91,000/81,000 = 1.12

2019

Inventory at Base Year costs = 134520/1.14 = $ 118,000

DVL cost = 118,000/1.12 = $ 105,357

2020

Cost Index= 146,640/122,200 = 1.2

DVL cost =122,200/1.12 = $ 109,107

2021

Base Year Costs = 1.12 * 130,820 =$ 146,518

Year End Costs = 146,518*1.25 = $ 183,148

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