Question

In: Accounting

Big Box Retailer began business during 2017, and decided to use the Dollar-Value LIFO Method to...

Big Box Retailer began business during 2017, and decided to use the Dollar-Value LIFO Method to account for Inventory.   On their December 31, 2017 Balance Sheet, Big Box reported an ending inventory balance of $ 2,000,000.

As of the end of 2017, Big Box scaled their price index to 100.   Various Information for Big Box Retailer is as follows:

                                             Inventory @       Price                                  Inventory Purchases

                                          “Current Cost”      Index              Year               During Year

    December 31, 2018        $ 2,400,000            120                2018             $   6,000,000

    December 31, 2019           2,250,000            125                2019                  8,000,000

A. At what amount will Big-Box Retailer report their Ending Inventory on their December 31, 2018 Balance Sheet?

B. What is the “Cost of Goods Sold” reported by Big Box Retailer for their fiscal year ending December 31, 2018?

C. At what amount will Big-Box Retailer report their Ending Inventory on their December 31, 2019 Balance Sheet ?

Solutions

Expert Solution

ekkarill92 answered 1 year ago
Next > < Previous

Related Solutions

Lance-Hefner Specialty Shoppes decided to use the dollar-value LIFO retail method to value its inventory. Accounting...
Lance-Hefner Specialty Shoppes decided to use the dollar-value LIFO retail method to value its inventory. Accounting records provide the following information: Cost Retail Merchandise inventory, January 1, 2018 $ 182,000 $ 280,000 Net purchases 372,600 535,000 Net markups 10,000 Net markdowns 5,000 Net sales 400,000 Related retail price indexes are as follows: January 1, 2018 1.00 December 31, 2018 1.20 Required: Determine ending inventory and cost of goods sold. Ending Inventory at retail Ending Inventory at cost COGS
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...
what is the dollar-value method of LIFO inventory valuation? What advantage does the dollar-value method have...
what is the dollar-value method of LIFO inventory valuation? What advantage does the dollar-value method have over the specific goods approach of LIFO inventory valuation? Why will the traditional LIFO inventory costing method and the dollar-value LIFO inventory costing method produce different inventory valuations if the composition of the inventory base changes
what is the dollar-value method of LIFO inventory valuation? What advantage does the dollar-value method have...
what is the dollar-value method of LIFO inventory valuation? What advantage does the dollar-value method have over the specific goods approach of LIFO inventory valuation? Why will the traditional LIFO inventory costing method and the dollar-value LIFO inventory costing method produce different inventory valuations if the composition of the inventory base changes
Harlequin Co. has used the dollar-value LIFO retail method since it began operations in early 2020...
Harlequin Co. has used the dollar-value LIFO retail method since it began operations in early 2020 (its base year). Its beginning inventory for 2021 was $42,000 at cost and $78,000 at retail prices. At the end of 2021, it computed its estimated ending inventory at retail to be $132,000. Assuming its cost-to-retail percentage for 2021 transactions was 60%, what is the inventory balance that Harlequin Co. would report in its 12/31/2021 balance sheet?
On January 1, 2017, Flounder Wholesalers Inc. adopted the dollar-value LIFO inventory method for income tax...
On January 1, 2017, Flounder Wholesalers Inc. adopted the dollar-value LIFO inventory method for income tax and external financial reporting purposes. However, Flounder continued to use the FIFO inventory method for internal accounting and management purposes. In applying the LIFO method, Flounder uses internal conversion price indexes and the multiple pools approach under which substantially identical inventory items are grouped into LIFO inventory pools. The following data were available for inventory pool no. 1, which comprises products A and B,...
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...
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...
In the context of dollar-value LIFO, what is a LIFO layer? Select one: a. The LIFO...
In the context of dollar-value LIFO, what is a LIFO layer? Select one: a. The LIFO value of an increase in the inventory for a given year. b. The inventory in base year dollars. c. The LIFO value of the inventory for a given year. d. The difference between the LIFO inventory and the amount used for internal reporting purposes.
Webster Products, Inc., adopted the dollar-value LIFO method of determining inventory costs
Webster Products, Inc., adopted the dollar-value LIFO method of determining inventory costs for financial and income tax reporting on January 1, 2021. Webster continues to use the FIFO method for internal decision-making purposes. Webster’s FIFO inventories at December 31, 2021, 2022, and 2023, were $300,000, $412,500, and $585,000, respectively. Internally generated cost indexes are used to convert FIFO inventory amounts to dollar-value LIFO amounts. Webster estimated these indexes as follows:  2021................1.00  2022.................1.25  2023.................1.50    Required:  1. Determine Webster’s dollar-value LIFO inventory...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT