Question

On January 1, 2020, Wildhorse Wholesalers Inc. adopted the dollar-value LIFO inventory method for income tax and external financial reporting purposes. However, Wildhorse continued to use the FIFO inventory method for internal accounting and management purposes. In applying the LIFO method, Wildhorse uses internal conversion price indexes and the multiple pools approach under which substantially identical inventory items are grouped into LIFO inventory pools. The following data were available for inventory pool no. 1, which comprises products A and B, for the 2 years following the adoption of LIFO. FIFO Basis per Records Units Unit Cost Total Cost Inventory, 1/1/20    Product A 11,400 $30 $342,000    Product B 10,260 25 256,500 $598,500 Inventory, 12/31/20    Product A 18,810 36 $677,160    Product B 10,260 26 266,760 $943,920 Inventory, 12/31/21    Product A 14,820 40 $592,800    Product B 11,400 32 364,800 $957,600

(a) Your answer is correct. Compute the internal conversion price indexes for 2020 and 2021. (Round price index to 2 decimal places, e.g. 1.62.) 2020 2021 Conversion price index Click if you would like to Show Work for this question: Open Show Work SHOW SOLUTION LINK TO TEXT Attempts: 3 of 15 used

(b) Your answer is incorrect. Try again. Compute the inventory amounts at December 31, 2020 and 2021, using the dollar-value LIFO inventory method. (Round answers to 0 decimal places, e.g. 5,620.) 2020 2021 Inventory $ $

Answer 1