Carla Vista Company manufactures one product. On December 31, 2019, Carla Vista adopted the dollar-value LIFO...

Carla Vista Company manufactures one product. On December 31, 2019, Carla Vista adopted the dollar-value LIFO inventory method. The inventory on that date using the dollar-value LIFO inventory method was $960,000. Inventory data are as follows:

Year	Inventory at year-end prices	Price index (base year 2019)
2020	$1,285,200	1.05
2021	1,840,000	1.15
2022	1,930,000	1.25

Compute the inventory at December 31, 2020, 2021, and 2022, using the dollar-value LIFO method for each year.

Inventory at December 31, 2020

Inventory at December 31, 2021

Inventory at December 31, 2022

Expert Solution

Date	Inventory at Year End Prices	Price Index (Base Year 2019)	Inventory at Base year Prices	Change From Previous Year
December 31, 2019	$960,000	1	$960,000	0
December 31, 2020	$1,285,200	1.05	$1,224,000	$264,000
December 31, 2021	$1,840,000	1.15	$1,600,000	$376,000
December 31, 2022	$1,930,000	1.25	$1,544,000	($56,000)

Now we can compute the dollar value inventory:

December 31, 2019
$960,000 @ 1.0	$960,000

December 31, 2020
$960,000 @ 1.0	$960,000
$264,000 @ 1.05	$277,200
December 31, 2020	$1,237,200

December 31, 2021
$960,000 @ 1.0	$960,000
$264,000 @ 1.05	$277,200
$376,000 @ 1.15	$432,400
December 31, 2021	$1,669,600

December 31, 2022
$960,000 @ 1.0	$960,000
$264,000 @ 1.05	$277,200
$320,000 @ 1.15	$368,000
December 31, 2022	$1,605,200

The Index price(1.15) of 2021 has been used because the ending inventory at base-year-prices ($1,544,000) is less than the beginning inventory at base-year-prices ($1,600,000).

ekkarill92 answered 2 years ago

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