Question

Ouestion 9 Your answer is partially correct. Try again. Crane Company had ending inventory at end-of-year prices of $80,000 at December 31, 2019; $98,230 at December 31, 2020; and $110,100 at December 31, 2021. The year-end price indexes were 100 at 12/31/19, 110 at 12/31/20, and 120 at 12/31/21. Compute the ending inventory for Crane Company for 2019 through 2021 using the dollar-value LIFO method 2019 2020 2021 Ending Inventory 80000

Answer 1

Solution:

Calculation of Ending Inventory using dollar value LIFO method

Date	Inventory at end of year prices	Price Index (percentage)	Inventory at base year prices	Change from prior year
Dec.31, 2019	$80,000	100	$80,000 ($80,000 / 100%)	$0
Dec.31, 2020	$98,230	110	$89,300 ($98,230 / 110%)	$9,300 ($89,300 – 80,000)
Dec.31, 2021	$110,100	120	$91,750 ($110,100 / 120%)	$2,450 ($91,750 – 89,300)

Dollar Inventory Value

	Dollar Inventory Value
Dec.31, 2019	$80,000
$80,000 * 1.00
Dec.31, 2020
$80,000 * 1.00	$80,000
$9,300 * 1.10	$10,230
	$90,230
Dec.31, 2021
$80,000 * 1.00	$80,000
$9,300 * 1.10	$10,230
$2,450 * 1.2	$2,940
	$93,170

	2019	2020	2021
Ending Inventory	$80,000	$90,230	$93,170

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