Question

Having some trouble, please Explain your answer thanks.

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 $310,000. Inventory data for 2021 through 2023 are as follows:

Date	Ending Inventory at Year-End Costs			Cost Index
12/31/2021	$	339,900		1.03
12/31/2022		382,950		1.11
12/31/2023		398,650		1.19

Required:
Calculate Taylor's ending inventory for 2021, 2022, and 2023.

Inventory Layers Converted to Base Year Cost Inventory Layers Converted to Cost Inventory DVL Cost Date Inventory 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 = Base = $0 12/31/2021 = Base = 2021 = $0 12/31/2022 = Base = 2021 = 2022 = $0 12/31/2023 = Base = 2021 = 2022 = 2023 = $0

Answer 1

Answer-

Inventory layers converted to base year cost						Inventory layers converted to Cost					Inventory DVL Cost
Date	Inventory 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 Cash
01/01/2021	310000	/	1	=	310000	Base	310000	*	1	=	310000
12/31/2021	339,900	/	1.03	=	330000	Base	310000	*	1	=	310000
						2021	20000	*	1.03	=	20600	330600
12/31/2022	382,950	/	1.11	=	345000	Base	310000	*	1	=	310000
						2021	20000	*	1.03	=	20600
						2022	15000	*	1.11	=	16,650	347,250
12/31/2023	398,650	/	1.19	=	335000	Base	310000	*	1	=	310000
						2021	20000	*	1.03	=	20600
						2022	5000	*	1.19	=	5950
						2023	0	*	0	=	0	336,550