Question

2. Bond Company adopted the dollar-value LIFO inventory method on January 1, 2018. In applying the LIFO method, Bond uses internal cost indexes and the multiple-pools approach. The following data were available for Inventory Pool No. 3 for the two years following the adoption of LIFO: Cost Index Year 1/1/2018 12/31/2018 12/31/2019 Ending Inventory At Base At Current Cost Year Cost $306,000 $306,000 337,575 321,500 430,800 359,000 1.00 1.05 1.20

undwr the lifo method, the inventory at December 31 should be?

Answer 1

Ending inventories: c D в E F Ending inventory Inventory at base year Inventory layers Ending inventory at base year cost Date converted to cost DV LIFO cost cost $306,000 $306,000 2 1/1/2018 $306,000 Inventory at January 1, 2018 Base $306.000 3 4 $321,500 $306,000 $15,500 5 31/12/2018 Base $306,000 $16,275 2018 6 7 Ending Inventory at December 31, 2018 $322.275 8 9 31/12/2019 $359,000 $306,000 S306,000 $16,275 $45,000 Base 2018 $15,500 10 11 $37,500 2019 $367,275 Ending Inventory at December 31, 2019 12. Calculations are shown below c D E Ending inventory Inventory at base Inventory layers Ending inventory в F year cost -B2 Date at base year cost 306000 converted to cost DV LIFO cost 2 43101 Base C2*(100/100) =E2 Inventory at January 1, 2018 4 5 31/12/2018 321500 -C2 =B5-C5 Ending Inventory at December 31, 2018 Base C5*(100/100) 2018 -C6*1.05 6 =SUM(E5:E6 8 9 31/12/2019 359000 C5 -C6 Base C9*(100/100) |2018 C10*1.05 =B9-C9-C10 2019C11*1.2 Ending Inventory at December 31, 2019 10 11 =SUM(E9:Ell) 12