On January 1, 2018, Avondale Lumber adopted the dollar-value LIFO inventory meth
ID: 341069 • Letter: O
Question
On January 1, 2018, Avondale Lumber adopted the dollar-value LIFO inventory method. The inventory value for its one inventory pool on this date was $280,000. An internally generated cost index is used to convert ending inventory to base year. Year-end inventories at year-end costs and cost indexes for its one inventory pool were as follows Year Ended December 31 2018 2019 2020 2021 Inventory Year-End Costs $356,530 367,500 416,580 446,355 Cost Index (Relative to Base Year) 1.01 1.05 1.06 1.09 Required: Calculate inventory amounts at the end of each year. (Round intermediate calculations and final answers to the nearest whole dollars.)Explanation / Answer
Date Inventory Layers Converted to Base Year Cost Inventory Layers Converted to Cost Ending Inventory DVL Cost Inventory at Year End Cost / Year-End Cost Index = Inventory Layers at Base Year Cost Inventory Layers at Base Year Cost Year-End Cost Index = Inventory Layers Converted to Cost 1/1/2018 280,000.00 / 1.00 = 280,000.00 Base 280,000.00 X 1.00 = 280,000.00 280,000.00 12/31/2018 356,530.00 / 1.01 = 353,000.00 Base 280,000.00 X 1.00 = 280,000.00 2018 73,000.00 X 1.01 = 73,730.00 353,730.00 12/31/2019 367,500.00 / 1.05 = 350,000.00 Base 280,000.00 X 1.00 = 280,000.00 2018 70,000.00 X 1.01 = 70,700.00 350,700.00 12/31/2020 416,580.00 / 1.06 = 393,000.00 Base 280,000.00 X 1.00 = 280,000.00 2018 70,000.00 X 1.01 = 70,700.00 2020 43,000.00 X 1.06 = 45,580.00 396,280.00 12/31/2021 446,355.00 / 1.09 = 409,500.00 Base 280,000.00 X 1.00 = 280,000.00 2018 70,000.00 X 1.01 = 70,700.00 2020 43,000.00 X 1.06 = 45,580.00 2021 16,500.00 X 1.09 = 17,985.00 414,265.00
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