Question

The following information relates to the Sarasota Company.

Date		Ending Inventory (End-of-Year Prices)				Price Index
December 31, 2013			$ 65,600			100
December 31, 2014			118,040			130
December 31, 2015			127,728			144
December 31, 2016			143,636			149
December 31, 2017			133,765			155

Use the dollar-value LIFO method to compute the ending inventory for Sarasota Company for 2013 through 2017.

Answer 1

Solution:

Computation of inventory at base year prices and change from prior year - Sarasota Company
Date	Inventory at end of year prices	Price index (Percentage)	Inventory at base year prices	Change from Prior Years
31-Dec-13	$65,600.00	100	$65,600.00	$0.00
31-Dec-14	$118,040.00	130	$90,800.00	$25,200.00
31-Dec-15	$127,728.00	144	$88,700.00	-$2,100.00
31-Dec-16	$143,636.00	149	$96,400.00	$7,700.00
31-Dec-17	$133,765.00	155	$86,300.00	-$10,100.00

Computation of dollar value inventory - LIFO
Particulars	Amount
December 31, 2013:
$65,600*$1	$65,600.00
December 31, 2014:
$65,600*$1	$65,600.00
$25,200*1.30	$32,760.00
Inventory at Dec 31, 2014	$98,360.00
December 31, 2015:
$65,600*$1	$65,600.00
$23,100*1.30	$30,030.00
Inventory at Dec 31, 2015	$95,630.00
December 31, 2016:
$65,600*$1	$65,600.00
$23,100*1.30	$30,030.00
$7,700*1.49	$11,473.00
Inventory at Dec 31, 2016	$107,103.00
December 31, 2017:
$65,600*$1	$65,600.00
$20,700*1.30	$26,910.00
Inventory at Dec 31, 2017	$92,510.00