Problem 8-11 this new method, so, as a private consultant, you have been askec t
ID: 2559728 • Letter: P
Question
Problem 8-11 this new method, so, as a private consultant, you have been askec to teach him how this new method works. He has provided you with the following information about purchases made over a 6-year period vegetable-type soups. Recently, the company decided to value its inventories using dollar-vaiue LIFO pools. The clerk who accounts for inventories does not understand how to value the in sing Ending Inventory (End-of-Year Date Dec. 31, 2013 Dec. 31, 2014 Dec. 31, 2015 Dec. 31, 2016 Dec. 31, 2017 Dec. 31, 2018 Prices) $75,300 117,284 113,250 134,460 154,906 182,559 Price Index 100 109 125 135 146 151 Seu bave srerd erpladto him wthis iveistory mehos ia aane, but he woula felbeer if you were to enve him detaled nstructions expa ining how these calaultons are cone and wiy he Compute the ending inventory for Rithardson Company for 2013 through 2018 using dollar-va ve LIFO Ending Inventory 2013 $ 2014 2015 2016 2017 2018Explanation / Answer
Date Current Price index Base Year Change from prior year 31-Dec-13 75300 1 75300 / 1 = 75300 31-Dec-14 117284 1.09 117284 / 1.09 = 107600 32300 (107600 - 75300) 31-Dec-15 113250 1.25 113250 / 1.25 = 90600 -17000 (90600 - 107600) 31-Dec-16 134460 1.35 134460 / 1.35 = 99600 9000 (99600 - 90600) 31-Dec-17 154906 1.46 154906 / 1.46 = 106100 6500 (106100 - 996000 31-Dec-18 182559 1.51 182559 / 1.51 = 120900 14800 (120900 - 106100) *Price index for calculation purpose = price index / 100 Ending Inventory Dollar-Value LIFO: YEAR ENDING INVENTORY 2013 75300 2014 110507 2015 94425 2016 106575 2017 116065 2018 138413 *CALCULATION: 2013 75300 @ 1.00 75300 2014 75300 @ 1.00 75300 32300 @ 1.09 35207 110507 2015 75300 @ 1.00 75300 (32300 - 17000) = 15300 @ 1.25 19125 94425 2016 75300 @ 1.00 75300 15300 @ 1.25 19125 9000 @ 1.35 12150 106575 2017 75300 @ 1.00 75300 15300 @ 1.25 19125 9000 @ 1.35 12150 6500 @ 1.46 9490 116065 2018 75300 @ 1.00 75300 15300 @ 1.25 19125 9000 @ 1.35 12150 6500 @ 1.46 9490 14800 @ 1.51 22348 138413