Dollar-Value LIFO Belstock Company manufactures one product. On December 31, 2015, Belstock adopted the dollar-value LIFO...

Dollar-Value LIFO

Belstock Company manufactures one product. On December 31, 2015, Belstock adopted the dollar-value LIFO inventory method. The inventory on that date using the dollar-value LIFO inventory method was $200,000. Inventory data for succeeding years are as follows:

Year	Inventory at Respective Year-End Prices	Price Index (Base Year 2015)
2016	$231,000	1.05
2017	299,000	1.15
2018	300,000	1.20

Required:

Compute the ending inventory using the dollar-value LIFO method for 2016, 2017, and 2018. Do not round your intermediate calculations. If required, round your answers to the nearest dollar.

1.	December 31, 2016	$ 221,000
2.	December 31, 2017	$ 267,000
3.	December 31, 2018	$

Expert Solution

2016
Adjusted 2016 inventory to 2015 base year price (231000/1.05)	220000
Value of 2015 inventory	200000
LIFO Layer (220000-200000)	20000

Value of 2015 inventory	200000*1	200000
Add: LIFO Layer	20000*1.05	21000
Ending Inventory at 2016		221000

2017
Adjusted 2017 inventory to 2015 base year price (299000/1.15)	260000
Adjusted 2016 inventory to 2015 base year price (231000/1.05)	220000
LIFO Layer (260000-220000)	40000

Value of 2015 inventory	200000*1	200000
Add: LIFO Layer 2016	20000*1.05	21000
Add: LIFO Layer 2017	40000*1.15	46000
Ending Inventory at 2017		67000

2018
Adjusted 2018 inventory to 2015 base year price (300000/1.20)	250000
Adjusted 2017 inventory to 2015 base year price (299000/1.15)	260000
LIFO Layer (250000-260000)	-10000

Value of 2015 inventory	200000*1	200000
Add: LIFO Layer 2016	20000*1.05	21000
Add: LIFO Layer 2017 (40000-10000)	30000*1.15	34500
Ending Inventory at 2018		255500

ekkarill92 answered 2 years ago

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