Question

The following information relates to the Shamrock Company.

Date		Ending Inventory (End-of-Year Prices)				Price Index
December 31, 2013			$ 69,400			100
December 31, 2014			102,080			116
December 31, 2015			110,208			128
December 31, 2016			123,816			132
December 31, 2017			116,058			138

Use the dollar-value LIFO method to compute the ending inventory for Shamrock Company for 2013 through 2017.

			Ending Inventory
2013			$
2014			$
2015			$
2016			$
2017			$

Answer 1

Solution:

Computation of inventory at base year prices and change from prior year - J&J Products
Year	Inventory at end of year prices	Price index (Percentage)	Inventory at base year prices	Change from Prior Years
2013	$69,400.00	100	$69,400	$0
2014	$102,080.00	116	$88,000	$18,600
2015	$110,208.00	128	$86,100	-$1,900
2016	$123,816.00	132	$93,800	$7,700
2017	$116,058.00	138	$84,100	-$9,700

Computation of dollar value inventory - LIFO
Particulars	Amount
December 31, 2013:
$69,400*$1	$69,400
December 31, 2014:
$69,400*$1	$69,400
$18,600*1.16	$21,576
Inventory at Dec 31, 2014	$90,976
December 31, 2015:
$69,400*$1	$69,400
$16,700*1.16	$19,372
Inventory at Dec 31, 2015	$88,772
December 31, 2016:
$69,400*$1	$69,400
$16,700*1.16	$19,372
$7,700*1.32	$10,164
Inventory at Dec 31, 2016	$98,936
December 31, 2017:
$69,400*$1	$69,400
$14700*1.16	$17,052
Inventory at Dec 31, 2017	$86,452