Question

F. Aber company manufactures one product . On dec 31,2016 Aber adopted the dollar value LIFO Inventory method. The inventory on that date using the dollar value LIFO inventory method was $900,000 Inventory data are as follows:

Year Inventory at year end prices Price index (base year 2016)  

2016 . 900,000 1.00

2017 . 1,260,000 1.05

2018 . 1,840,000 1.15

2019   1,900,000 1.25

F1. Compute the inventory at december 31, 2017, 2018, 2019 using the dollar value lifo method for each year.

F2. What is the LIFO reserve on Dec 31, 2017

Date Ending Inv Current $ Price index Base-Year $ Layers at base year prices Multiply by that years price index LIFO Amount

PROES A. The provided PROBLEM F Dollar-value UFO method Aber Company manufactures one produc The inventory on that date using the doma Year 2016(base year) 2017 2018 2019 Instructions one product On December 2016 Aber adopted the dollar value LIFO inventory method the dollar value LIFO inventory method was $900.000. Inventory data are as follows: Inventory at Price Index yearend prices Casera 2010 800.000 $1.260.000 1.840.000 1.000.000 1.05 1.15 1.25 1. Compute the inventory at December 31, 2017, 2018, and 2019. using the dollar value LIFO method for each year. LIFO amount Ending Inventory Current $ Price Index Layers at base Multiply by that year's year prices price index Year $ Date 2016 2017 2018 2019 2. What is the LIFO reserve on Dec 31, 2017? PROBLEM G: Doran Realty Company purchased a plot of ground for $1,900,000 and spent $4,100,000 in developing it for building lots. The lots were classified into Highland, Midland, and Lowland grades, to sell at $120,000 $90,000, and $60,000 each, respectively. Instructions Complete the table below to allocate the cost of the lots using a relative sales value method. (4) No. of Selling Total % of Apportioned Cost Grade Lots Price Revenue Total Sales Total Per Lot Highland 20 $ $ Midland 40 $ $ Lowland 100 $ 160 $ $

G. Doran realty company purchased a plot of ground for 1,900,000 and spent 4,100,000 in developing it for building lots. The lots were classified into Highland, Midland, and lowland grades to sell at 120,000, 90,000 and 60,000 each respectively. Comple the table to allocate the cost of the lots using a realtive sales value method.

Answer 1

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Calculation

Year	Inventory value at year end price	Divided by: Price Index	Inventory value at base Price	Increase in base inventory
2016			900,000
2017	1,260,000	1.05	1,200,000	300,000
2018	1,840,000	1.15	1,600,000	400,000
2019	1,900,000	1.25	1,520,000	(80,000)
Inventory value Using Dollars value LIFO Method
		Inventory at base price	Multiply by: Price Index	Inventory Value
For Year 2017
Layer 1	Beginning inventory at 2016	900,000	1.00	900,000
Layer 2	Increase in Inventory (1200000-900000)	300,000	1.05	315,000
Inventory value Using Dollars value LIFO Method at end of 2017				$       1,215,000
For Year 2018
Layer 1	Beginning inventory at 2016	900,000	1.00	900,000
Layer 2	Increase in Inventory (1200000-900000)	300,000	1.05	315,000
Layer 3	Increase in Inventory (1600000-1200000)	400,000	1.15	460,000
Inventory value Using Dollars value LIFO Method at end of 2018				$       1,675,000
For Year 2019
Layer 1	Beginning inventory at 2016	900,000	1.00	900,000
Layer 2	Increase in Inventory (1200000-900000)	300,000	1.05	315,000
Layer 3	Increase in Inventory (1520000-1200000)	320,000	1.15	368,000
Inventory value Using Dollars value LIFO Method at end of 2019				$       1,583,000

Date	Ending Inventory	Price Index	Base-Year	Layer at base year price	Multiply: price index	LIFO amount
2016	$        900,000	1.00	$        900,000	$        900,000	1.00	$        900,000
2016 total	$        900,000					$        900,000
2017	$    1,260,000	1.05	$    1,200,000	$        900,000	1.00	$        900,000
				$        300,000	1.05	$        315,000
2017 total	$    1,260,000					$    1,215,000
2018	$    1,840,000	1.15	$    1,600,000	$        900,000	1.00	$        900,000
				$        300,000	1.05	$        315,000
				$        400,000	1.15	$        460,000
2018 total	$    1,840,000					$    1,675,000
2019	$    1,900,000	1.25	$    1,520,000	$        900,000	1.00	$        900,000
				$        300,000	1.05	$        315,000
				$        320,000	1.15	$        368,000
2019 total	$    1,900,000					$    1,583,000

Year		2017
Inventory value at year end price		1,260,000
Less: Inventory value Using Dollars value LIFO Method		1,215,000
LIFO Reserve		$               45,000