Question

Exercise 8-23 Dollar-value LIFO (LO8-8] On January 1, 2018, the Haskins Company adopted the dollar-value LIFO method for its one inventory pool. The pool's value on this date was $720,000. The 2018 and 2019 ending Inventory valued at year-end costs were $754,000 and $848,000, respectively. The appropriate cost indexes are 1.04 for 2018 and 1.06 for 2019. Required: Complete the below table to calculate the Inventory value at the end of 2018 and 2019 using the dollar-value LIFO method. (Round "Year end cost Index" to 2 decimal places. Round other final answer values to the nearest whole dollars.) Inventory Layers Converted to Base Year Cost Inventory Layers Converted to Cost Ending 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 Base 01/01/2018 12/31/2018 12/31/2019 Base 2018 Base 2018 2019

Answer 1

Solution:

Date	Inventory layer converted to base year cost					Inventory layers converted to cost						Ending inventory DVLCost
	Inventory at year end cost	/	Year end cost index		Inventory layer at base year cost		Inventory layer at base year cost	*	Year end cost index	=	Inventory layer converted to costs
1-Jan-18	$720,000.00	/	1.00		$720,000.00	Base	$720,000.00	*	1	=	$720,000.00	$720,000.00
31-Dec-18	$754,000.00	/	1.04		$725,000.00	Base	$720,000.00	*	1	=	$720,000.00
						2018	$5,000.00	*	1.04	=	$5,200.00	$725,200.00
31-Dec-19	$848,000.00	/	1.06		$800,000.00	Base	$720,000.00	*	1	=	$720,000.00
						2018	$5,000.00	*	1.04	=	$5,200.00
						2019	$75,000.00	*	1.06	=	$79,500.00	$804,700.00