Question

On January 1, 2021, the Taylor Company adopted the dollar-value LIFO method. The inventory value for its one inventory pool on this date was $370,000. Inventory data for 2021 through 2023 are as follows: Date 12/31/2021 12/31/2022 12/31/2023 Ending Inventory at Year-End Costs $417,300 469,800 493,750 Cost Index 1.07 1.16 1.25 Required: Calculate Taylor's ending inventory for 2021, 2022, and 2023.

Answer 1

	Inventory Layers at base year cost						Inventory layers Converted to Cost					Inventory DVL Cost
Date	Inventory Layers at year end cost	/	Year end cost index	=	Inventory Layers at base year cost		Inventory Layers at base year cost	*	Year end cost index	=	Inventory layers Converted to Cost
01/01/2021	370000	/	1	=	370000	Base	370000	*	1	=	370000
12/31/2021	417300	/	1.07	=	390000	Base	370000	*	1	=	370000
						2021	20000	*	1.07	=	21400	391400
12/31/2022	469800	/	1.16	=	405000	Base	370000	*	1	=	370000
						2021	20000	*	1.07	=	21400
						2022	15000	*	1.16	=	17400	408800
12/31/2023	493750	/	1.25	=	395000	Base	370000	*	1	=	370000
						2021	20000	*	1.07	=	21400
						2022	5000	*	1.16	=	5800	397200