Question

Problem 8-9 nary 1 2017 Stellar whalesalers Inc. adopted the dollar value LIFO inventory method for income tax and externa financial reporting purposes. However, Stellar continued to use the FIFO nventory me dd for internal accounting and manager purposes. In app ying the LIFO method, Stellar uses internal conversion price indexes and the multiple pools approach under which substantially dent cal inventory items are grouped into LIF。inventory pools. The pool no. 1, which comprises products A and B, for the 2 years following the adoption of LIFO. lo ing data were available or inventory FIFO Basis per Records Unit Units Cost Total Cost Inventory, 1/1/17 Product A Product D 11,900 $46$547,400 414,200 $961,600 10,900 38 Inventory, 12/31/17 Product A Product E 18,900 10,900 55$1,039,500 436,000 1,475,500 40 Inventory, 12/31/18 Product A Product B 14,900 $908,900 583,100 $1,492,000 11,900 49 Compute the internal conversion price indexes for 2017 and 2019. (Round price index to 0 decimal places, e.g. 162.) 2017 2018 Conversion price index Compute the inventory amounts at December 31, 2017 and 2018, using the dollar-value LIFO inventory method. (Round answers to 0 decimal places, e.g. 5,620.) 2017 2010 Inventorys

Answer 1

Answer

Calculation of Price indet 20n a 2ol3 For Qo17 =〉 Current price at year end base price ,415,50o GI, Goc 153% For 3o18 CuYYent priCe at year nd base pice 2,000 155 % G, 6od Callatif Endingventoryt207 2ol3 Date Ending Znventory end ot yea r Ending dnventory Cbas year prices) 31116 31/ 475,500 153 2131118 1,492,00 o 49 2.000 χ 100 155 2,5155

Ending nventory layers base ycar pritesbase year price index Endin Vento (at LE Fo Cost) 2016 1GI, Goo 6I,600 σ ning 2017 61,GoO 2011 964,319 61,600 x oo x15:3 961,600 4 252 965, 852 2119 201 8 62,58 G1,6oo loo 61,600 I501 (2011 8 153 963, (o I internal Conversion Pile index 2018 =〉 1557 2-JAvemto vy a士December 3112017 → $965, 852 De cember 3 2018-> $ G3 lo