Ajman Corporation adopted the dollar-value LIFO method of inventory valuation on December 31, 2017. Its inventory...

Ajman Corporation adopted the dollar-value LIFO method of inventory valuation on December 31, 2017. Its inventory at that date was 220000 and the relevant price index was 100. Information regarding inventory for subsequent years is as follows.

Date Inventory at Current Prices Current Price index

December 31, 2018 256800 107

December 31, 2019 320000 108

December 31, 2020 350000 120

A. What is the cost of ending inventory on December 31, 2018 under dollar value LIFO

B. What is the cost of ending inventory on December 31, 2019 under dollar value LIFO

C. What is the cost of ending inventory on December 31, 2020 under dollar value LIFO

Expert Solution

A. What is the cost of ending inventory on December 31, 2018 under dollar value LIFO

ANSWER = 241400

B. What is the cost of ending inventory on December 31, 2019 under dollar value LIFO

ANSWER = 302200

C. What is the cost of ending inventory on December 31, 2020 under dollar value

ANSWER = 297200

Year	Inventory at end of year prices	Index	Inventory at base-year prices	Base Layers	Index	LIFO Value	LIFO Value Total

December, 31, 2017	220000	1	220000	220000	1	220000	220000

				220000	1	220000
December, 31, 2017	256800	1.07	240000	20000	1.07	21400	241400

				220000	1	220000
December, 31, 2018	320000	1.08	296296	20000	1.07	21400
				56296	1.08	60800	302200

				220000	1	220000
December, 31, 2019	350000	1.20	291667	20000	1.07	21400
				51667	1.08	55800.36
				0	1.2	0	297200

ekkarill92 answered 3 hours ago

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