Question
In: Accounting
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 |
Current Year |
Year End |
|||||
| 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 |
ekkarill92 answered 1 year agoRelated Solutions
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