Question

In: Accounting

The following information relates to the Novak Company. Date Ending Inventory (End-of-Year Prices) Price Index December...

The following information relates to the Novak Company.

Date

Ending Inventory
(End-of-Year Prices)

Price
Index

December 31, 2013 $ 66,900 100
December 31, 2014 103,194 117
December 31, 2015 110,940 129
December 31, 2016 124,887 133
December 31, 2017 115,787 139


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

Solutions

Expert Solution

Compute the ending inventory for Novack Company for 2013 through 2017 using the dollar-valueLIFO method

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

December 31, Ending inventory(a) Price index(b) Base year(a/b) Change from prior year
2013 66900 1 66900
2014 103194 1.17 88200 21300
2015 110940 1.29 86000 -2200
2016 124887 1.33 93900 7900
2017 115787 1.39 83300 -10600
Ending inventory - dollar value : LIFO
2013 66900                 66,900
Total                 66,900
2014 66900X1                 66,900
21300X1.17                 24,921
Total                 91,821
2015 66900X1                 66,900
19100X1.17                 22,347
Total                 89,247
2016 66900X1 66900
19100X1.17                 22,347
7900X1.33                 10,507
Total 99754
2017 66900X1 66900
16400X1.17                 19,188
Total 86088

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