Question

Kingston Company uses the dollar-value LIFO method of computing inventory. An external price index is used to convert ending inventory to a base year. The company began operations on January 1, 2021, with an inventory of $165,000. Year-end inventories at year-end costs and cost indexes for its one inventory pool were as follows:

Year Ended	Ending Inventory			Cost Index
December 31	at Year-End Costs			(Relative to Base Year)
2021	$	243,800		1.06
2022		324,500		1.18
2023		304,750		1.15
2024		299,700		1.11

Required:
Calculate inventory amounts at the end of each year. (Round intermediate calculations and final answers to the nearest whole dollars.)

Answer 1

Calculate ending inventory

		Ending inventory
1/1/2021		165000
12/31/2021	243800/1.06 = 230000	(165000+65000*1.06) = 233900
12/31/2022	324500/1.18 = 275000	(233900+45000*1.18) = 287000
12/31/2023	304750/1.15 = 265000	(233900+35000*1.18) = 275200
12/31/2024	299700/1.11 = 270000	(275200+5000*1.11) = 280750