Question

Calculate the sales cost of goods sold and cost of goods available for sale in dollars and units using the P periodic FIFO, periodic average cost, perpetual FIFAO, perpetual LIFO.

a variety of vegetable-type LIFO pools. The clerk who ng this new method, 50, as a two decimal places. P8.11 (LO 4) Writing (Dollar-Value LIFO) Richardson Company cans a variety of soups. Recently, the company decided to value its inventories using dollar-value LIFO pools accounts for inventories does not understand how to value the inventory pools using this new method private consultant, you have been asked to teach him how this new method works. He has provided you with the following information about purchases made over a 6-year Ending Inventory (End-of-Year Prices) Price Index Date Dec. 31, 2016 $ 80,000 100 Dec. 31, 2017 111,300 105 Dec. 31, 2018 108,000 120 Dec. 31, 2019 128,700 130 Dec. 31, 2020 147,000 140 Dec. 31, 2021 174,000 145 You have already explained to him how this inventory method is maintained, but he would feel better about it if you were to leave him detailed instructions explaining how these calculations are done and why he needs to put all inventories at a base-year value.

Answer 1

Richardson Company Year 2010 2011 2012 2013 2014 2015 $ 80,000.00 $1,11,300.00 $1,08,000.00 $1,28,700.00 $1,47,000.00 $1,74,000.00 Price Index Ending Inv (LIFO) 100 $ 80,000.00 105 1,06,000.00 120 $ 90,000.00 $ 99,000.00 140 $ 1,05,000.00 145 $ 1,20,000.00 130 In LIFO, the last inventory is first used and hence the ending inventory contains the earliest of the stocks. In inflationary environment, LIFO inventory is therefore lower than FIFO inventory. Steps: Ending Inv at base price= Inventory/price index Ending inventory = Ending Inv at base price* base level price index

B Inv Price Index A i Richardson Company 2 3 Year 4 2010 80000 5 =A4+1 111300 6 =A5+1 108000 7 =A6+1 128700 8 =A7+1 147000 9 =A8+1 174000 10 100 105 120 Ending Inv (LIFO) =B4/C4*$C$4 =B5/C5*$C$4 =B6/C6*$C$4 =B7/C7*$C$4 =B8/C8*$C$4 =B9/09*$C$4 130 140 145