In: Accounting
Retail Corp adopted the dollar-value LIFO method on 1-1-2016.
Date |
Year-end inventory at year-end cost |
Cost index at date indicated |
|||
1-1-16 |
$2,340,000 |
1.00 |
|||
12-31-16 |
$2,650,000 |
1.06 |
|||
12-31-17 |
$2,680,000 |
1.10 |
Given the above information, please answer the following questions:
1A. What is the base inventory value ($)?
1B. What is the dollar-value LIFO inventory at 12-31-16?
1C. What is the dollar-value LIFO inventory at 12-31-2017?
1A. Base inventory value :
It is the value reported at end of the year. Here, it is
01-01-2016 and value is $23,40,000 / 1.00
.'. Base inventory value. => $23,40,000
Dollar value
lifo inventory
method :
1B. Dollar value lifo inventory at
12-31-2016.
Inventory at base year price :
=> $26,50,000 / 1.06
=> $25,00,000
Real dollar increase in inventory :
=> ($25,00,000 - $23,40,000)
=> $1,60,000
Real dollar increase in inventory at year end prices :
=> $1,60,000 x 1.06
=> $1,69,600
Begining inventory (01-01-2016) $23,40,000
( + ) Increase in 2016 $1,69,600
Dollar value
inventory for
12-31-2016
$25,09,600
1C. Dollar value lifo inventory at
12-31-2017.
Inventory at base year price :
=> $26,80,000 / 1.10
=> $24,36,364
Real dollar increase in inventory :
=> ($24,36,364 - $26,50,000)
=> ( $2,13,636 )
Real dollar increase in inventory at year end prices :
=> ( $2,13,636 ) x 1.10
=> ( $2,35,000 )
Begining inventory (01-01-2017) $26,50,000
( + ) Increase in 2017 ( $2,35,000 )
Dollar value
inventory for
12-31-2017
$24,15,000
_ _ _ x _ _ _
ALL THE BEST
For any queries drop a comment below :