Question

In: Accounting

Gross Corporation adopted the dollar-value LIFO method of inventory valuation on December 31, 2017. Its inventory...

Gross Corporation adopted the dollar-value LIFO method of inventory valuation on December 31, 2017. Its inventory at that date was $440,000 and the relevant price index was 100. Information regarding inventory for subsequent years is as follows:

Inventory at Current

Date Current Prices Price Index(%)

December 31, 2018 $513,600 107

December 31, 2019 580,000 125

December 31, 2020 650,000 130

4- What is the cost of the ending inventory at December 31, 2018 under dollar-value LIFO?

a. $480,000.

b. $513,600.

c. $482,800.

d. $470,800.

e. None of the above

5- What is the cost of the ending inventory at December 31, 2019 under dollar-value LIFO?

a. $464,000.

b. $462,800.

c. $480,000.

d. $465,680.

e. None of the above

Expert Solution

Working

	Inventory Layers Converted to Base Year Cost					Inventory Layers Converted to Cost						Ending Inventory DVL Cost
Date	Inventory at Year end cost		Year End Cost Index		Inventory Layers at Base Year Cost		Inventory Layers at Base Year Cost		Year End Cost Index	=	Inventory Layers Converted to Cost
01-Jan-18	$440,000	/	1.00	=	$440,000	Base	$440,000	x	1.00	=	$440,000	$440,000

31-Dec-18	$513,600	/	1.07	=	$480,000	Base	$440,000	x	1.00	=	$440,000
						2018	$40,000	x	1.07	=	$42,800	$482,800

31-Dec-19	$580,000	/	1.25	=	$464,000	Base	$440,000	x	1.00	=	$440,000
						2018	$24,000	x	1.07	=	$25,680
												$465,680

Requirements

[4]: Cost of ending inventory 31 Dec 2018 = $ 482,800 [Option ‘C’]
[5]: Cost of ending inventory 31 Dec 2019 = $ 465,680 [Option ‘D’]

ekkarill92 answered 10 months ago

Bramble Corp. adopted the dollar-value LIFO method of inventory valuation on December 31, 2016. Its inventory...

Bramble Corp. adopted the dollar-value LIFO method of inventory valuation on December 31, 2016. Its inventory at that date was $1102000 and the relevant price index was 100. Information regarding inventory for subsequent years is as follows: Date Inventory at Current Prices Current Price Index December 31, 2017 $1296000 108 December 31, 2018 1441000 125 December 31, 2019 1612000 130 What is the cost of the ending inventory at December 31, 2019 under dollar-value LIFO?

Lewis Company adopted the dollar-value LIFO method of inventory valuation on 12/31/18. Its inventory at that...

Lewis Company adopted the dollar-value LIFO method of inventory valuation on 12/31/18. Its inventory at that date was $320,000 and the relevant price index was 100. What will Lewis report as inventory at the end of 2019, 2020, 2021, and 2022 using dollar-value LIFO? Date Inv at current price current price index inv at base level price 12/31/19 338,000 104 325,000 12/31/20 371,000 106 350,000 12/31/21 372,600 108 345,000 12/31/22 381,500 109 350,000

Eastman Corporation manufactures one product. On December 31, 2018, Eastman adopted the dollar-value LIFO inventory method....

Eastman Corporation manufactures one product. On December 31, 2018, Eastman adopted the dollar-value LIFO inventory method. The inventory on that date using the dollar-value LIFO inventory method was $850,000. Inventory data are as follows: Year Inventory @ Year-End Prices Price Index (base year 2018 2019 $1,180,000 1.05 2020 $1,940,000 1.15 2021 $1,800,000 1.25 1. Compute the inventory at December 31, 2019, 2020 and 2021, using the dollar-value LIFO method for each year, including the LIFO Reserve....

The dollar-value LIFO method was adopted by Riverbed Corp. on January 1, 2017. Its inventory on...

The dollar-value LIFO method was adopted by Riverbed Corp. on January 1, 2017. Its inventory on that date was $220,000. On December 31, 2017, the inventory at prices existing on that date amounted to $201,600. The price level at January 1, 2017, was 100, and the price level at December 31, 2017, was 112. Compute the amount of the inventory at December 31, 2017, under the dollar-value LIFO method. Inventory 12/31/17 under dollar-value LIFO method On December 31, 2018, the...

Olson Company adopted the dollar-value LIFO method for inventory valuation at the beginning of 2015. The...

Olson Company adopted the dollar-value LIFO method for inventory valuation at the beginning of 2015. The following information about the inventory at the end of each year is available from Olson's records: Year Current Costs Index 2014 $50,000 100 2015 60,000 108 2016 70,000 115 2017 73,000 125 2018 78,000 135 Required: 1. Calculate the dollar-value LIFO inventory at the end of each year. Do not round your intermediate calculations. Round final answers to the nearest dollar. 2015 2016 2017...

Dalton Sporting Goods adopted the dollar-value LIFO method for inventory valuation in 2016. Use the information...

Dalton Sporting Goods adopted the dollar-value LIFO method for inventory valuation in 2016. Use the information below to determine the cumulative cost of the ending inventory at December 31, 2019 under dollar-value LIFO (in other words, what would be the inventory balance on Dalton’s Balance Sheet at 12.31.19). Inventory at Current Date Current Prices Price Index December 31, 2016 $150,000 100 December 31, 2017 $189,000 105 December 31, 2018 270,000 120 December 31, 2019 260,000 130 What is the cumulative...

Aber Company manufactures one product. On December 31, 2016, Aber adopted the dollar-value LIFO inventory method....

Aber Company manufactures one product. On December 31, 2016, Aber adopted the dollar-value LIFO inventory method. The inventory on that date using the dollar-value LIFO inventory method was $900,000. Inventory data are as follows: Year Inventory at year-end prices Price index (base year 2016) 2017 $1,260,000 1.05 2018 1,840,000 1.15 2019 1,900,000 1.25 Compute the inventory at December 31, 2017, 2018, and 2019, using the dollar-value LIFO method for each year. Inventory at December 31, 2017 $ Inventory at December...

The dollar-value LIFO method was adopted by Blossom Corp. on January 1, 2020. Its inventory on...

The dollar-value LIFO method was adopted by Blossom Corp. on January 1, 2020. Its inventory on that date was $399,900. On December 31, 2020, the inventory at prices existing on that date amounted to $380,800. The price level at January 1, 2020, was 100, and the price level at December 31, 2020, was 112. On December 31, 2021, the inventory at prices existing on that date was $421,245, and the price level was 115. Compute the inventory on that date...

On January 1, 2021, the Coldstone Corporation adopted the dollar-value LIFO retail inventory method. Beginning inventory...

On January 1, 2021, the Coldstone Corporation adopted the dollar-value LIFO retail inventory method. Beginning inventory at cost and at retail were $180,000 and $282,000, respectively. Net purchases during the year at cost and at retail were $604,500 and $920,000, respectively. Markups during the year were $10,000. There were no markdowns. Net sales for 2021 were $900,000. The retail price index at the end of 2021 was 1.04. What is the inventory balance that Coldstone would report in its 12/31/2021...

On January 1, 2018, the Coldstone Corporation adopted the dollar-value LIFO retail inventory method. Beginning inventory...

On January 1, 2018, the Coldstone Corporation adopted the dollar-value LIFO retail inventory method. Beginning inventory at cost and at retail were $180,000 and $292,950, respectively. Net purchases during the year at cost and at retail were $736,000 and $911,000, respectively. Markups during the year were $9,000. There were no markdowns. Net sales for 2018 were $878,000. The retail price index at the end of 2018 was 1.05. What is the inventory balance that Coldstone would report in its 12/31/2018...