Bramble Corp. adopted the dollar-value LIFO method of inventory valuation on December 31, 2016. Its inventory...

Bramble Corp. adopted the dollar-value LIFO method of inventory valuation on December 31, 2016. Its inventory at that date was $1102000 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, 2017		$1296000		108
December 31, 2018		1441000		125
December 31, 2019		1612000		130

What is the cost of the ending inventory at December 31, 2019 under dollar-value LIFO?

Expert Solution

Cost of the ending inventory at December 31, 2019 under dollar-value LIFO is $1,270,224

	Current	Price index	Base year	Change from prior year

2016	1,102,000	1.00	1,102,000	-
2017	1,296,000	1.08	1,200,000	98,000
2018	1,441,000	1.25	1,152,800	(47,200)
2019	1,612,000	1.30	1,240,000	87,200



Ending Inventory—Dollar-value LIFO

2016	1,102,000

2017	(1,102,000*1) = $1,102,000
	(98,000*1.08) = 105,840

	(1,102,000+1,05840) = $1,207,840

2018	(1,102,000*1) = $1,102,000
	[(1,152,800-1,102,000) * 1.08 ]= $54,864

	(1,102,000+54,864) = $1,156,864

2019	(1,102,000*1) = $1,102,000
	[(1,152,800-1,102,000) * 1.08 ]= $54,864
	[(1,240,000-1,152,800) * 1.30 ]= $113,360

	(1,102,000+54,864+113,360) = $1,270,224

ekkarill92 answered 1 year ago

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