Victor Manufacturing Co., switched from FIFO to LIFO on January 1, 2004 for external reporting and income tax purposes, while retaining FIFO for internal reports. On that date the FIFO inventory equaled $360,000. The ensuing three-year period resulted in the following;DateInventory Year-End CostsCost IndexDecember 31, 2004$438,0001.05December 31, 2005460,0001.25December 31, 2006520,0001.35The ending inventory at December 31, 2006, using the Dollar-value LIFO method would be a. $391,600b. $402,000c. $426,000d. $386,444

The dollar value correlated with the items in inventory at the close of an accounting cycle is known…

Answered: Victor Manufacturing Co., switched from…

SWFT Individual Income Taxes

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ISBN:9780357391365

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Chapter18: Accounting Periods And Methods

Section: Chapter Questions

Problem 67P

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Victor Manufacturing Co., switched from FIFO to LIFO on January 1, 2004 for external reporting and income tax purposes, while retaining FIFO for internal reports. On that date the FIFO inventory equaled $360,000. The ensuing three-year period resulted in the following;

Date	Inventory Year-End Costs	Cost Index
December 31, 2004	$438,000	1.05
December 31, 2005	460,000	1.25
December 31, 2006	520,000	1.35

The ending inventory at December 31, 2006, using the Dollar-value LIFO method would be

a. $391,600

b. $402,000

c. $426,000

d. $386,444

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