Question

The following information relates to the Steven Garcia Company. Ending Inventory Price Date (End-of-Year Prices) Index December 31, 2016 $68,900 100 December 31, 2017 115,712 128 December 31, 2018 125,386 142 December 31, 2019 139,722 146 December 31, 2020 131,121 153 Use the dollar-value LIFO method to compute the ending inventory for Garcia Company for 2016 through 2020. Ending Inventory 2016 2017 2018 $ $ $ 2019 to 2020 to

Answer 1

	Ending Inventory
2016	$                                                             68,900
2017	$                                                             96,420
2018	$                                                             93,732
2019	$                                                         1,04,536
2020	$                                                             90,404
Workings:
Date	Ending Inventory	Price Index	Base year prices	Increase / (Decrease)
	(i)	(ii)	(iii) = [(i) / (ii)]*100	(iv)
2016	$                                                             68,900	100	$                        68,900	$                                     -
2017	$                                                         1,15,712	128	$                        90,400	$                           21,500
2018	$                                                         1,25,386	142	$                        88,300	$                            -2,100
2019	$                                                         1,39,722	146	$                        95,700	$                              7,400
2020	$                                                         1,31,121	153	$                        85,700	$                          -10,000
			Ending Inventory under LIFO
2016	($68900*1)	=	$                        68,900
2017	($68900*1) + ($21500*1.28)	=	$                        96,420
2018	($68900*1) + [($21500-$2100)*1.28]	=	$                        93,732
2019	($68900*1) + ($19400*1.28) + ($7400*1.46)	=	$                    1,04,536
2020	($68900*1) + [($19400-2600)*1.28]	=	$                        90,404
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