Question

In: Accounting

   DATE                                       &nbs

   DATE                                            Ending Inventory(end of year prices)               Price Index

December 31, 2013                                          $ 69,400                                               100

December 31, 2014                                          102,080                                                 116

December 31, 2015                                          110,208                                                 128

December 31, 2016                                          123,816                                                 132

December 31, 2017                                          116,058                                                 138

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

                                                Ending Inventory

2013 - 69400

2014 - ?

2015 - ?

2016 - ?

2017- ?

Solutions

Expert Solution

Year Ending Inventory
31-Dec-13 $69,400.00
31-Dec-14 $90,976.00
31-Dec-15 $88,772.00
31-Dec-16 $105,472.00
31-Dec-17 $86,452.00
Working Note
Inventory in 2013= $69400
Computation of Inventory in 2014 will be
Inventory Without Indexation=88000
Curent Year Lifo Layer 18600
Hence, Closing inventory will be $ 90976
( 69400*1+ 18600*1.16)
Computation of Inventory in 2015 will be
Inventory Without Indexation=86100
Curent Year Lifo Layer -1900
Hence, Closing inventory will be $ 88772
( 69400*1+ (86100-69400)*1.16)
Computation of Inventory in 2016 will be
Inventory Without Indexation=93800
Curent Year Lifo Layer 7700
Hence, Closing inventory will be $ 105472
( 69400*1+ (86100-69400)*1.16)+ 7700*1.28)
Computation of Inventory in 2017 will be
Inventory Without Indexation=84100
Curent Year Lifo Layer -9700
Hence, Closing inventory will be $ 86452
( 69400*1+ (84100-69400)*1.16)
Working Note
Year Inventory Price Index Inventory without Indexation Current year Lifo Layer
31-Dec-13 69400 100 69400 -
31-Dec-14 102080 116 88000 18600
31-Dec-15 110208 128 86100 -1900
31-Dec-16 123816 132 93800 7700
31-Dec-17 116058 138 84100 -9700

ekkarill92 answered 2 years ago
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