Question

In: Accounting

Inventory for Charles Smart company is as follows: 2015 Current Cost 200000.00 Index 1.00 2016 Current...

Inventory for Charles Smart company is as follows:

2015 Current Cost 200000.00 Index 1.00

2016 Current Cost 230000.00 Index 1.20

2017 Current Cost 250000.00 Index 1.40

Compute dollar value LIFO for 2015, 2016, and 2017

Solutions

Expert Solution

inventory at base year prices = inventory at end of year prices / price index

December 31, Ending inventory(a) Price index(b) Inventory at Base year prices(a/b) Change from prior year
2015           200,000                 1        200,000
2016           230,000            1.20        191,667              (8,333)
2017           250,000            1.40        178,571            (13,095)
Ending inventory - dollar value lifo
December 31,
2015 200000X1          200,000
Total          200,000
2016 191667X1          191,667
Total          191,667
2017 178571X1          178,571
Total          178,571

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