On January 1, 2011, the National Furniture Company adopted the dollar-value LIFO method of computing inventory. An internal cost index is used to convert ending inventory to base year. Inventory on January 1 was $200,000. Year-end inventories at year-end costs and cost indexes for its one inventory pool were as follows:         Year Ended December 31Inventory at Year-end CostCost Index (Relative to Base Year      2016259,2001.08      2017296,8001.12      2018299,0001.15               Compute inventory amounts at the end of each year

Question
Asked Nov 9, 2019
5 views
On January 1, 2011, the National Furniture Company adopted the dollar-value LIFO method of computing inventory. An internal cost index is used to convert ending inventory to base year. Inventory on January 1 was $200,000. Year-end inventories at year-end costs and cost indexes for its one inventory pool were as follows:
                 
Year Ended December 31 Inventory at Year-end Cost Cost Index (Relative to Base Year            
2016 259,200 1.08            
2017 296,800 1.12            
2018 299,000 1.15            
                 
Compute inventory amounts at the end of each year        
check_circle

Expert Answer

Step 1

Inventory on Jan-1 is $ 200,000. If we assume prices at the beginning of the year to be 100%, we can conclude that inventory on Dec 31, 2015 to be $ 200,000 at 1 cost index. We shall preapare the attached table on the basis of information provided in the quest...

help_outline

Image Transcriptionclose

Ending inventory Changes at base- Cost Inventory at Index (Relative year Year Ended Year-end Cost in $ from prior year in $ December to Base Year prices in 31 200000 240000 265000 260000 2015 2016 2,59,200 2017 200000 1 0 40000 1.08 2,96,800 2018 2,99,000 1.12 25000 5000 1.15

fullscreen

Want to see the full answer?

See Solution

Check out a sample Q&A here.

Want to see this answer and more?

Solutions are written by subject experts who are available 24/7. Questions are typically answered within 1 hour.*

See Solution
*Response times may vary by subject and question.
Tagged in

Business

Accounting

Related Accounting Q&A

Find answers to questions asked by student like you
Show more Q&A
add
question_answer

Q: I am struggling to solve this problem

A: Meaning of Fixed Overhead Spending Variance:Fixed Overhead spending variance is also known as fixed ...

question_answer

Q: Required information [The following information applies to the questions displayed below.] Ramirez C...

A: Double-declining-balance method: The depreciation method which assumes that the consumption of econo...

question_answer

Q: why is the accounting important to a business

A: Accounting: Accounting is a process of recording financial transactions of a business. The process o...

question_answer

Q: Bonds Payable has a balance of $1,000,000, and Discount on Bonds Payable has a balance of $15,500. I...

A: Bonds payable are kind of long term debt generally issued by governments and corporations. The issue...

question_answer

Q: I need helo solving this problem

A:  Calculate the direct labor rate, efficiency, and spending variances.

question_answer

Q: Practice 2:  a: Define standard costs. b: under what conditions should previously established stand...

A: a. Standard costs are the estimated costs of the items, processes, products which are used in the ma...

question_answer

Q: A physical inventory of Liverpool Company taken at December 31 reveals the following.          Pe...

A: Hence, $324,136 is total amount of cost or market whichever is lower

question_answer

Q: Q. question 4

A: Prepare entry for reselling the shares.

question_answer

Q: Raffie’s Kids, a nonprofit organization that provides aid to victims of domestic violence, low-incom...

A: Mortgage payable is an obligation account whose balance is the unpaid and is recorded on the liabili...