GEN COMBO LOOSELEAF INTERMEDIATE ACCOUNTING; CONNECT ACCESS CARD
9th Edition
ISBN: 9781260089042
Author: J. David Spiceland
Publisher: McGraw-Hill Education
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Chapter 8, Problem 8.13BE
Dollar-value LIFO
• LO8–8
At the beginning of 2018, a company adopts the dollar-value LIFO inventory method for its one inventory pool. The pool’s value on that date was $1,400,000. The 2018 ending inventory valued at year-end costs was $1,664,000 and the year-end cost index was 1.04. Calculate the inventory value at the end of 2018 using the dollar-value LIFO method.
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8
Goldmeyer Company has used the FIFO method of inventory valuation since it began operations in 2021. Goldmeyer decided to
change to the average cost method for determining inventory costs at the beginning of 2024. The following schedule shows year-end
inventory balances under the FIFO and average cost methods:
eBook
101
Hint
D
Print
References
Year
2021
2022
2023
FIFO
$46,200
81,600
87,800
Required:
1. Ignoring income taxes, prepare the 2024 journal entry to adjust the accounts to reflect the average cost method.
2. How much higher or lower would cost of goods sold be in the 2023 revised income statement?
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Ignoring income taxes, prepare the 2024 journal entry to adjust the accounts to reflect the average cost method.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
View transaction list
Average Cost
$ 56,400
72,200
81,600
P 8-14 Dollar-value LIFO
LO8-8
Kingston Company uses the dollar-value LIFO method of computing inventory. An external price index is used
to convert ending inventory to base year. The company began operations on January 1, 2018, with an inventory
of $150,000. Year-end inventories at year-end costs and cost indexes for its one inventory pool were as follows:
Year Ended
December 31
2018
2019
2020
2021
Ending Inventory
at Year-End Costs
$200,000
245,700
235,980
228,800
Cost Index
(Relative to Base Year)
1.08
1.17
1.14
1.10
Required:
Calculate inventory amounts at the end of each year.
Problem 8-13 (Algo) Dollar-value LIFO [LO8-8]
On January 1, 2024, a company adopted the dollar-value LIFO method. The inventory value for its one inventory pool on this date was
$390,000. Inventory data for 2024 through 2026 are as follows:
Date
12/31/2024
12/31/2025
12/31/2026
Date
Required:
Calculate the company's ending inventory for 2024, 2025, and 2026,
01/01/2024
12/31/2024
12/31/2025
Ending Inventory at
Year-End Costs
$ 430,500
484,500
510,450
12/31/2026
Cost Index
1.05
1.14
1.23
Inventory Layers Converted to Base Year Cost
Inventory
Layers at
Base Year
Cost
Inventory at
Year-End
Cost
Year-End
Cost
Index
M
T
a
W
Base
Base
2024
Base
2024
2025
Base
2024
2025
2026
Inventory Layers Converted to Cost
Year-End
Cost
Index
Inventory
Layers at Base
Year Cost
-
M
"
.
Inventory
Layers
Converted to
Cost
Inventory DVL
Cost
$
$
$
$
0
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0
0
Chapter 8 Solutions
GEN COMBO LOOSELEAF INTERMEDIATE ACCOUNTING; CONNECT ACCESS CARD
Ch. 8 - Describe the three types of inventory of a...Ch. 8 - What is the main difference between a perpetual...Ch. 8 - The Cloud Company employs a perpetual inventory...Ch. 8 - The Bockner Company shipped merchandise to Laetner...Ch. 8 - What is a consignment arrangement? Explain the...Ch. 8 - Prob. 8.6QCh. 8 - The Esquire Company employs a periodic inventory...Ch. 8 - Prob. 8.8QCh. 8 - Its common in the electronics industry for unit...Ch. 8 - Explain why proponents of LIFO argue that it...
Ch. 8 - Prob. 8.11QCh. 8 - Describe the ratios used by financial analysts to...Ch. 8 - Prob. 8.13QCh. 8 - Prob. 8.14QCh. 8 - The Austin Company uses the dollar-value LIFO...Ch. 8 - Identify any differences between U.S. GAAP and...Ch. 8 - Determining ending inventory; periodic system ...Ch. 8 - Prob. 8.2BECh. 8 - Prob. 8.3BECh. 8 - Purchas e discounts; gross method LO83 On...Ch. 8 - Prob. 8.5BECh. 8 - Prob. 8.6BECh. 8 - Inventor y cost flow methods; perpetual system ...Ch. 8 - LIFO method LO84 Esquire Inc. uses the LIFO...Ch. 8 - LIFO method LO84 AAA Hardware uses the LIFO...Ch. 8 - LIFO liquidation LO86 Refer to the situation...Ch. 8 - Prob. 8.11BECh. 8 - Ratio analysis LO87 Selected financial statement...Ch. 8 - Dollar-value LIFO LO88 At the beginning of 2018,...Ch. 8 - Perpetual inventory system; journal entries LO81...Ch. 8 - Prob. 8.2ECh. 8 - Determining cost of goods sold; periodic inventory...Ch. 8 - Perpetual and periodic inventory systems compared ...Ch. 8 - Prob. 8.6ECh. 8 - Goods in transit; consignment LO82 The December...Ch. 8 - Physical quantities and costs included in...Ch. 8 - Prob. 8.9ECh. 8 - Prob. 8.10ECh. 8 - Prob. 8.11ECh. 8 - FASB codification research LO82, LO83 Access the...Ch. 8 - Inventory cost flow methods; periodic system ...Ch. 8 - Inventory cost flow methods; perpetual system ...Ch. 8 - Comparison of FIFO and LIFO; periodic system ...Ch. 8 - Average cost method; periodic and perpetual...Ch. 8 - FIFO, LIFO, and average cost methods LO81, LO84...Ch. 8 - Supplemental LIFO disclosures; LIFO reserve; AEP...Ch. 8 - LIFO liquidation LO81, LO84, LO86 The Reuschel...Ch. 8 - Dollar-value LIFO LO88 On January 1, 2018, the...Ch. 8 - Dollar-value LIFO LO88 Mercury Company has only...Ch. 8 - Dollar-value LIFO LO88 Carswell Electronics...Ch. 8 - Concepts; terminology LO81 through LO85 Listed...Ch. 8 - Various inventory transactions; journal entries ...Ch. 8 - Prob. 8.2PCh. 8 - Prob. 8.4PCh. 8 - Various inventory costing methods LO81, LO84...Ch. 8 - Various inventory costing methods LO81, LO84...Ch. 8 - Supple mental LIFO disclosures; Caterpillar LO84,...Ch. 8 - LIFO liquidation LO84, LO86 Taylor Corporation...Ch. 8 - LIFO liquidation LO84, LO86 Cansela Corporation...Ch. 8 - Prob. 8.11PCh. 8 - Integrating problem; inventories and accounts...Ch. 8 - Dollar-value LIFO LO88 On January 1, 2018, the...Ch. 8 - Dollar-value LIFO LO88 Kingston Company uses the...Ch. 8 - Dollar-value LIFO LO88 On January 1, 2018,...Ch. 8 - Prob. 8.1BYPCh. 8 - Real World Case 82 Physical quantities and costs...Ch. 8 - Judgment Case 83 The specific identification...Ch. 8 - Prob. 8.4BYPCh. 8 - Prob. 8.5BYPCh. 8 - Judgment Case 86 Goods in transit LO82 At the end...Ch. 8 - Ethics Case 87 Profit manipulation LO84 In 2017...Ch. 8 - Real World Case 88 Effects of inventory valuation...Ch. 8 - Real World Case 89 Effects of inventory valuation...Ch. 8 - Communication Case 810 Dollar-value LIFO method ...Ch. 8 - Prob. 8.11BYPCh. 8 - Prob. 8.CCTCCh. 8 - Prob. CCIFRS
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