Question

In: Accounting

Retail Corp adopted the dollar-value LIFO method on 1-1-2015. (Divide; separate into layers; multiply each layer...

Retail Corp adopted the dollar-value LIFO method on 1-1-2015.

(Divide; separate into layers; multiply each layer by own index)

4

Date

Year-end inventory at year-end cost

Cost index at date indicated

Ending inventory at base year cost

separate into layers and multiply by own index

Sum recomputed layers

1-1-15

$100,000

1.00

12-31-15

$220,000

1.10

12-31-16

$225.000

1.20

12-31-17

$240,000

1.30

12-31-18

$300,000

1.35

Solutions

Expert Solution

Date Year-end inventory at year-end cost Cost index at date indicated Ending inventory at base year cost separate into layers and multiply by own index Sum recomputed layers
1/1/2015 $    100,000.00           1.00 100,000.00 =$100,000*1.00          100,000.00
12/31/2015 $    220,000.00           1.10 200,000.00 =$100,000*1.00
'=$100,000*1.10
$100,000.00
$110,000.00
=$210,000.00
12/31/2016 $    225,000.00           1.20 187,500.00 =$100,000*1.00
=$87,500*1.10
$100000.00
$96250.00
=$196,250.00
12/31/2017 $    240,000.00           1.30 184,615.00 =$100,000*1.00
=$84,615*1.20
$100,000.00
$101,538.00
=201,538.00
12/31/2018 $    300,000.00           1.35 222,222.00 =$100,000*1.00
=$122,222*1.30
$100,000.00
$158,889.00
=258,889.00

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