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9. Dollar-value LIFO. Aber Company manufactures one product. On December 31, 2019, Aber adopted the dollar- value LIFO inventory method. The inventory on that date using the dollar-value LIFO inventory method was $900,000. Inventory data are as follows: Year 2020 2021 2022 Inventory at year-end prices $1.260,000 1,840,000 1,900,000 Price index (base year 2019) 1.05 1.15 1.25 Instructions Compute the inventory at December 31, 2020, 2021, and 2022, using the dollar-value LIFO method for each year. Page 3

Answer 1

Solution:

Aber Company

Dollar Value LIFO Computation

At December 31,2020, 2021 and 2022

	Ending inventory at Base - Year Price	Layers at Base year	Price Index	Ending Inventory Dollar - Value LIFO
12/31/2020	$1,260,000 ÷ 1.05 =$1,200,000	$900,000	1.00	$900,000
		$300,000	1.05	$315,000
				$1,215,000
12/31/2021	$1,840,000 ÷1.15 = $1,600,000	$900,000	1.00	$900,000
		$300,000	1.05	$315,000
		$400,000	1.15	$460,000
				$1,675,000
12/31/2022	$1,900,000 ÷ 1.25 =$1,520,000	$900,000	1.00	$900,000
		$300,000	1.05	$315,000
		$320,000	1.15	$368,000
				$1,583,000