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Marin Corporation adopted the dollar-value LIFO retail inventory method on January 1, 2019. At that time...

Marin Corporation adopted the dollar-value LIFO retail inventory method on January 1, 2019. At that time the inventory had a cost of $52,000 and a retail price of $100,000. The following information is available.

Year-End
Inventory at Retail

Current Year
Cost—Retail %

Year End
Price Index

2019 $119,780 60% 106
2020 147,400 63% 110
2021 124,260 64% 114
2022 148,750 61% 125


The price index at January 1, 2019, is 100.

Compute the ending inventory at December 31 of the years 2019–2022.

Solutions

Expert Solution

YEAR 2019
S. No. Amount
1 Ending Year Inventory at retail (Current Index) 119780
2 Ending Year Inventory at retail (Base Index ) (119780/1.06) 113000
3 Beginning inventory at retail, base 100000
4 Increase at retail (base index) (2-3) 13000
5 Increase at retail (Current index) (13000*1.06) 13780
6 Increase at cost (Current index) 13780*60% 8268
7 Beginning inventory cost 52000
8 Dollar Value Retail LIFO ending inventory (6+7) 60268
YEAR 2020
S. No. Amount
1 Ending Year Inventory at retail (Current Index) 147400
2 Ending Year Inventory at retail (Base Index ) (147400/1.10) 134000
3 Beginning inventory at retail, base 113000
4 Increase at retail (base index) (2-3) 21000
5 Increase at retail (Current index) (21000*1.10) 23100
6 Increase at cost (Current index) 23100*63% 14553
7 Beginning inventory cost 52000
8 Dollar Value Retail LIFO ending inventory (6+7) 66553
YEAR 2021
S. No. Amount
1 Ending Year Inventory at retail (Current Index) 124260
2 Ending Year Inventory at retail (Base Index ) (124260/1.14) 109000
3 Beginning inventory at retail, base 134000
4 Increase at retail (base index) (2-3) -25000
5 Increase at retail (Current index) (-25000*1.14) -28500
6 Increase at cost (Current index) 28500*64% -18240
7 Beginning inventory cost 66553
8 Dollar Value Retail LIFO ending inventory (6+7) 48313
YEAR 2022
S. No. Amount
1 Ending Year Inventory at retail (Current Index) 148750
2 Ending Year Inventory at retail (Base Index ) (148750/1.25) 119000
3 Beginning inventory at retail, base 109000
4 Increase at retail (base index) (2-3) 10000
5 Increase at retail (Current index) (10000*1.25) 12500
6 Increase at cost (Current index) 12500*61% 7625
7 Beginning inventory cost 48313
8 Dollar Value Retail LIFO ending inventory (6+7) 55938

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