Mercury Company has only one inventory pool. On December 31, 2018, Mercury adopt
ID: 2529043 • Letter: M
Question
Mercury Company has only one inventory pool. On December 31, 2018, Mercury adopted the dollar-value LIFO inventory method. The inventory on that date using the dollar-value LIFO method was $202,000. Inventory data are as follows 2019 2020 2021 Ending Inventory at Year-End Costs $235,200 305,900 307,200 Ending Inventory at Base Year Costs $224,000 266,000 256,000 Required: Compute the inventory at December 31, 2019, 2020, and 2021, using the dollar-value LIFO method. (Round "Year end cost index" to 2 decimal places.)Explanation / Answer
Ans)
202,000
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 Ending inventory DVL cost 12/31/2018 202,000 / 1 = 202,000 Base 202,000 X 1 = 202,000 202,000 12/31/2019 235200 / index = 224000 1.05202,000
Base 202000 X 1 = 202,000 33200 2019 33200 X 1.05 = 34860 236860 12/31/2020 305900 / index = 266000 1.15 202000 Base 202000 X 1 = 202000 33200 2019 33200 X 1.05 = 34860 30800 2020 30800 X 1.15 = 35420 272280 12/31/2021 307200 / index = 256000 1.2 202000 Base 202000 X 1 = 202000 33200 2019 33200 X 1.05 = 34860 20800 2020 20800 X 1.15 = 23920 260780