On January 1, 2018, the Haskins Company adopted the dollar-value LIFO method for
ID: 2508085 • Letter: O
Question
On January 1, 2018, the Haskins Company adopted the dollar-value LIFO method for its one inventory pool. The pool’s value on this date was $700,000. The 2018 and 2019 ending inventory valued at year-end costs were $741,000 and $819,000, respectively. The appropriate cost indexes are 1.04 for 2018 and 1.05 for 2019.
Required:
Complete the below table to calculate the inventory value at the end of 2018 and 2019 using the dollar-value LIFO method. (Round "Year end cost index" to 2 decimal places. Round other final answer values to the nearest whole dollars.)
Explanation / Answer
2018 $ Ending Inventory at Base Year Cost (741000/1.04) 712500 Inventory Layers at Base Year Cost: Base 700000 2018 (712500-700000) 12500 712500 Inventory Layers Converted to Cost: 660000*1 660000 12500*1.04 13000 673000 2019 $ Ending Inventory at Base Year Cost (819000/1.05) 780000 Inventory Layers at Base Year Cost: Base 700000 2018 12500 2019 (780000-700000-12500) 67500 780000 Inventory Layers Converted to Cost: 660000*1 660000 12500*1.04 13000 67500*1.05 70875 743875