Question

Presented below is information related to Metlock Company.

Date		Ending Inventory (End-of-Year Prices)				Price Index
December 31, 2014			$ 83,800			100
December 31, 2015			176,802			158
December 31, 2016			175,320			180
December 31, 2017			197,535			195
December 31, 2018			238,140			210
December 31, 2019			286,452			218

Compute the ending inventory for Metlock Company for 2014 through 2019 using the dollar-value LIFO method.

Answer 1

	Ending Inventory
2014	$                                                             83,800
2015	$                                                         1,28,198
2016	$                                                         1,05,288
2017	$                                                         1,12,893
2018	$                                                         1,38,303
2019	$                                                         1,77,543
Workings:
Date	Ending Inventory	Price Index	Base year prices	Increase / (Decrease)
	(i)	(ii)	(iii) = [(i) / (ii)]*100	(iv)
31-Dec-14	$                                                             83,800	100	$                        83,800	$                                     -
31-Dec-15	$                                                         1,76,802	158	$                    1,11,900	$                           28,100
31-Dec-16	$                                                         1,75,320	180	$                        97,400	$                          -14,500
31-Dec-17	$                                                         1,97,535	195	$                    1,01,300	$                              3,900
31-Dec-18	$                                                         2,38,140	210	$                    1,13,400	$                           12,100
31-Dec-19	$                                                         2,86,452	218	$                    1,31,400	$                           18,000
			Ending Inventory under LIFO
2014	($83800*1)	=	$                        83,800
2015	($83800*1) + ($28100*1.58)	=	$                    1,28,198
2016	($83800*1) + [($28100-$14500)*1.58)]	=	$                    1,05,288
2017	($83800*1) + ($13600*1.58) + ($3900*1.95)	=	$                    1,12,893
2018	($83800*1) + ($13600*1.58) + ($3900*1.95) + ($12100*2.10)	=	$                    1,38,303
2019	($83800*1) + ($13600*1.58) + ($3900*1.95) + ($12100*2.10) + ($18100*2.18)	=	$                    1,77,543
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