Question

Problem IV: (4.5 pts) Woodberry Corp. uses the dollar-value LIFO (DVL) inventory costing method. It has the following normal account balances at 12/31/20 before the year-end adjustment to convert the cost of its inventory to LIFO using the DVL method: Inventory (at FIFO costs) LIFO reserve S 200,000 dr 25,000 cr At the end of 2020, Woodberry computes the cost of its ending inventory using the DVL method to be $160,000 Required: In the journal below, prepare the year-end entry to adjust the inventory account to its cost using the dollar-value-LIFO method. Debit Credit 12/31/20 Accounting Check Set up the t-accounts for the initial account balances at 12/31/20 (before the adjustment). Post your entry. Does the difference between the Inventory and LIFO Reserve account balances equal the cost of inventory using the DVL method? If it does not check your calculations and/or entry. Problem V: (6 pts) Linton Corp. adopted the dollar-value LIFO (DVL) method on December 31, 2018 (base year) Information regarding inventory for 2018 - 2020 is as follows: Date Ending Inventory at Current Prices (FIFO) Price Index 12/31/18 $ 580,000 100% or 1.0 12/31/19 715,000 110% or 1.10 12/31/20 739,200 112% or 1.12 Question: I be the cost of inventory at 12/31/20 using the DVL met d? und all calculations to the nearest whole dollar. Reminder: show clear calculations to receive partial credit. Space for calculations: (add space or paper if necessary) Answer: $

Answer 1

Problem w: FIFO inventory LIFO inventory LLFO Reserve a = $200000 - $ 160000 LIFO Reserre LIFO Reserve 4 ч ороо Given lifo rierve in the beginning - $25000 LIFO effect = LIFO reserve - beginning Lifo effect - $400 00 LifO reserve in the $250DO LIFD effect $ 15000 Journal entry at the end of the year : pare Accocent Name Debit credit 12/31120 cost of Goode sold $15000 Allowance to reduce inventory to LIFO $15000 a =

cm) 112 $66 ODDD odot Dollar value LLFO DEV (DVL) method is computation og cost of inventory at 13:12020 Problema lar og DLV method: Inventory at end of year Percentage Inventory change from min Year. at base Index of price year O pricat $560D0D $650000 $7000D 12/31|18 12131)19 12/31/20 LOU'I donio 10%.com) il $ 58000D $145000 41.391 900 computation of Dollar value of syventory: $580D0D $5800 00 @ 1.0 124811.19 45 80000 @ LO 470000 1 $5 RODOD $17000 $657000 12|31|20: $580000 $70000 @ 1.1 $LOD OD 1.12 $500000 $ 17000 & 11200 TUL $666200 The cost of inventory at 12/31/20 under) $668, 100 2/2 =