Question

Presented below is information related to Windsor Company. Ending Inventory (End-of-Year Prices) Price Index Date December 31, 2017 $ 84,700 100 December 31, 2018 164,199 147 December 31, 2019 161,112 168 December 31, 2020 181,636 182 December 31, 2021 218,932 196 December 31, 2022 258,825 203 Compute the ending inventory for Windsor Company for 2017 through 2022 using the dollar-value LIFO method. Ending Inventory 2017 2018 2019 2020 2021 2022

Please explain how to calculate the answers. Thank You!

Answer 1

Firstly we need to calculate change in inventory from prior years which is shown as follows:-

(Amounts in $)

	Current Value (A)	Price Index (B)	Value at Base Year [(A/B)*100]	Change from Prior Year
2017	84,700	100	84,700	-
2018	164,199	147	111,700	+27,000
2019	161,112	168	95,900	-15,800
2020	181,636	182	99,800	+3,900
2021	218,932	196	111,700	+11,900
2022	258,825	203	127,500	+15,800

Ending Inventory-Dollar Value LIFO

2017 - $84,700

2018- $84,700*100/100 = $84,700

$27,000*147/100 = $39,690

$124,390

2019- $84,700*100/100 = $84,700

(27,000-15,800)*147/100 = $16,464

$101,164

2020-$84,700*100/100 = $84,700

(27,000-15,800)*147/100 = $16,464

$3,900*182/100 = $7,098

$108,262

2021-$84,700*100/100 = $84,700

(27,000-15,800)*147/100 = $16,464

$3,900*182/100 = $7,098

$11,900*196/100 = $23,324

$131,586

2022-$84,700*100/100 = $84,700

(27,000-15,800)*147/100 = $16,464

$3,900*182/100 = $7,098

$11,900*196/100 = $23,324

$15,800*203/100 = $32,074

$163,660

Ending Inventory under Dollar Value LIFO (Amounts in $)

	Ending Inventory
2017	84,700
2018	124,390
2019	101,164
2020	108,262
2021	131,586
2022	163,660