Question

Presented below is information related to Skysong Company. Date Ending Inventory (End-of-Year Prices) Price Index December 31, 2017 $ 87,400 100 December 31, 2018 152,755 137 December 31, 2019 148,824 156 December 31, 2020 168,493 169 December 31, 2021 200,018 182 December 31, 2022 238,140 189 Compute the ending inventory for Skysong Company for 2017 through 2022 using the dollar-value LIFO method.

Ending Inventory 2017:

Ending Inventory 2018:

Ending Inventory 2019:  

Ending Inventory 2020:

Ending Inventory 2021:

Ending Inventory 2022:

Answer 1

Ans: Computation of Ending Inventory of Skysong Company for 2017 through 2022 using the dollar-value LIFO method.

Year	Inventory at end of year prices	Price Index	Inventory at base prices year	Changes since prior year	LIFO Inventory
Dec 31, 2017	$87,400	100	$87,400	-	$87,400
Dec 31, 2018	$152,755	137	$152755/137 * 100= $111500	$24,100 ($111500-$87400)	$120,417
Dec 31, 2019	$148,824	156	$148824/156 * 100= $95400	($16,100)	$98,360
Dec 31, 2020	$168,493	169	$168493/169 * 100= $99700	$4,300	$105,627
Dec 31, 2021	$200,018	182	$200018/182 * 100= $109900	$10,200	$124,191
Dec 31, 2022	$238,140	189	$238140/189 * 100= $126000	$16,100	$154,620

LIFO Inventory Valuation-

December 31, 2017 : $87,400 x 100 / 100 = $87,400

December 31, 2018 : $87,400 + ($24,00 x 137/100) = $120,417

December 31, 2019 : $87,400 + [($24,00 - $16,100) x 137/100] = $98,360

December 31, 2020 : $ 98,360 + ($4,300 x 169/100) = $105,627

December 31, 2021 : $105,627 + ($10,200 x 182/100) = $124,191

December 31, 2022 : $124,191 + ($16,100 x 189/100) = $154,620