Question

On January 1, 2018, the Haskins Company adopted the dollar-value LIFO method for its one inventory pool. The pool’s value on this date was $850,000. The 2018 and 2019 ending inventory valued at year-end costs were $897,000 and $972,000, respectively. The appropriate cost indexes are 1.04 for 2018 and 1.08 for 2019.
Required:
Complete the below table to calculate the inventory value at the end of 2018 and 2019 using the dollar-value LIFO method. (Round "Year end cost index" to 2 decimal places. Round other final answer values to the nearest whole dollars.

	Inventory Layers Converted to Base Year Cost Inventory Layers Converted to Cost Ending Inventory DVL Cost Date 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 01/01/2018 = Base = $0 12/31/2018 = Base = 2018 = $0 12/31/2019 = Base = 2018 = 2019 = $0

Answer 1

Calculation of ending Inventory Using DVL Method
A	B	C	D	E	F	G	H
Date	Ending Inventory at year End Cost	Cost Index	Ending Inventory at base Year cost	Inventory Layers at base Year Cost		Inventory Layers Converted to	Ending Inventory at DVL Cost
01-01-2018	8,50,000	1	8,50,000	8,50,000	(Base)	8,50,000	8,50,000
31-12-2018	8,97,000	1.04	862500(897K/1.04)	8,50,000	(Base)	8,50,000
				12500(850k-862,500)	2018	13,000(12500*1.04)	8,63,000(850k+13K)
31-12-2018	9,72,000	1.08	9,00,000(972k/1.08)	8,50,000	(Base)	8,50,000
				12,500(Previous base)	2018	13,000
				37,500(972k-850k-12500)	2019	40,500(37500*1.08)	9,03,500

Hence the Inventory Value at the end of 2018 and 2019 is $863,000 And $903,500

Note: Ending Inventory at Base Year Cost=Ending Inventory at year End cost/Cost Index

Inventory Layers converted to Acquistion Year cost=Inventory layers at base year cost*cost Index