INTERMEDIATE ACTG+CONNECT <LOOSE>
9th Edition
ISBN: 9781260517125
Author: SPICELAND
Publisher: MCGRAW-HILL CUSTOM PUBLISHING
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Textbook Question
Chapter 8, Problem 8.15P
Dollar-value LIFO
• LO8–8
On January 1, 2018, Avondale Lumber adopted the dollar-value LIFO inventory method. The inventory value for its one inventory pool on this date was $260,000. An internally generated cost index is used to convert ending inventory to base year. Year-end inventories at year-end costs and cost indexes for its one inventory pool were as follows:
| Year Ended December 31 | Inventory Year-End Costs | Cost Index (Relative to Base Year) |
| 2018 | $340,000 | 1.02 |
| 2019 | 350,000 | 1.06 |
| 2020 | 400,000 | 1.07 |
| 2021 | 430,000 | 1.10 |
Required:
Calculate inventory amounts at the end of each year.
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base year. The company began operations on January 1, 2024, with an inventory of $275,000. Year-end inventories at year-end costs
and cost indexes for its one inventory pool were as follows:
Year Ended
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Ending Inventory at Cost Index (Relative to
Year-End Costs
Base Year)
$ 378,000
1.08
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480,260
1.18
2026
456,550
1.15
2027
440,000
1.10
Required:
Calculate inventory amounts at the end of each year.
Note: Round intermediate calculations and final answers to the nearest whole dollars.
Inventory Layers Converted
to Base Year Cost
Inventory Layers Converted to Cost
Inventory DVL
Cost
Date
Inventory at
Year-End
Cost
Inventory
Layers at
Base Year
Inventory
Layers at Base
Year Cost
Inventory
Layers
Converted to
Cost
Cost
01/01/2024
Base
$
0
12/31/2024
Base
2024
$
0
12/31/2025
Base
2024
2025
$
0
12/31/2026
Base
2024
2025
2026
$
0…
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.
01
Ross Company provided the following data for the current.
year:
Problem 14-11 (IAA)
Retail
Cost
1,650,000
4,200,000
2,000,000
6N
Beginning inventory
Net purchases
Net markup
Net markdown
800,000
200,000 -
Net sales
The entity used the average retail inventory method to
estimate ending inventory.
It was determined that the average cost of the ending
inventory was P1,950,000.
If the entity used the FIF0 retail method, the cost ratio
would have been 60%.
1. What is the amount of net purchases at original retail
before markup and markdown?
a. 7,600,000
b. 7,000,000
с. 4,200,000
d. 6,400,000
2. What amount was reported as net sales?
a. 9,000,000
b. 3,000,000
c. 6,000,000
d. 7,000,000
3. What amount was reported as cost of goods sold?
a. 3,900,000
b. 3,000,000
c. 3,600,000
d. 1,800,000
398
E HA C
Chapter 8 Solutions
INTERMEDIATE ACTG+CONNECT <LOOSE>
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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