Mercury Company has only one inventory pool. On December 31, 2024, Mercury adopted the dollar-value LIFO inventory method. The inventory on that date using the dollar-value LIFO method was $200,000. Inventory data are as follows: Year 2025 2026 2027 Ending Inventory at Year-End Costs $ 231,000 299,000 300,000 Ending Inventory at Base Year Costs $220,000 260,000 250,000 Required: Compute the inventory at December 31, 2025, 2026, and 2027, using the dollar-value LIFO method. Note: Round "Year end cost index" to 2 decimal places. Answer is complete but not entirely correct. Inventory Layers Converted to Base Year Cost Inventory Layers Converted to Cost Inventory DVL Cost Inventory Year- End Ending Inventory Ending Year- Date at Year- at Base Inventory End Inventory Layers Cost at Base Cost Converted End Cost Year Index Year Cost Index to Cost Cost 12/31/2024 $ 200,000 ( 1 $ 200,000 ( Base $ 200,000 x 1 = $ 200,000 $ 200,000 12/31/2025 $ 231,000 1.05 $220,000 Base $ 200,000 x 1 = $ 200,000 2025 $ 223,100 × 1.05 = $ 23,100 $223,100 12/31/2026 $ 299,000 ( 1.15 = $ 260,000 Base $ 200,000 ( 1 = $ 200,000 2025 $220,000 x 1.05 = $ 23,100 × 2026 $ 38,000 x 1.15 = $ 43,700 $266,800 12/31/2027 $ 300,000 1.2 = $ 250,000 ( Base $ 200,000 × 1 = $ 200,000 2025 $ 220,000 × 1.05 = $ 23,100 × 2026 $ 38,000 × x 1.15 = $ 43,700X 2027 $ (12,000) x 1.2 × = $ (14,400) $ 252,400
Mercury Company has only one inventory pool. On December 31, 2024, Mercury adopted the dollar-value LIFO inventory method. The inventory on that date using the dollar-value LIFO method was $200,000. Inventory data are as follows: Year 2025 2026 2027 Ending Inventory at Year-End Costs $ 231,000 299,000 300,000 Ending Inventory at Base Year Costs $220,000 260,000 250,000 Required: Compute the inventory at December 31, 2025, 2026, and 2027, using the dollar-value LIFO method. Note: Round "Year end cost index" to 2 decimal places. Answer is complete but not entirely correct. Inventory Layers Converted to Base Year Cost Inventory Layers Converted to Cost Inventory DVL Cost Inventory Year- End Ending Inventory Ending Year- Date at Year- at Base Inventory End Inventory Layers Cost at Base Cost Converted End Cost Year Index Year Cost Index to Cost Cost 12/31/2024 $ 200,000 ( 1 $ 200,000 ( Base $ 200,000 x 1 = $ 200,000 $ 200,000 12/31/2025 $ 231,000 1.05 $220,000 Base $ 200,000 x 1 = $ 200,000 2025 $ 223,100 × 1.05 = $ 23,100 $223,100 12/31/2026 $ 299,000 ( 1.15 = $ 260,000 Base $ 200,000 ( 1 = $ 200,000 2025 $220,000 x 1.05 = $ 23,100 × 2026 $ 38,000 x 1.15 = $ 43,700 $266,800 12/31/2027 $ 300,000 1.2 = $ 250,000 ( Base $ 200,000 × 1 = $ 200,000 2025 $ 220,000 × 1.05 = $ 23,100 × 2026 $ 38,000 × x 1.15 = $ 43,700X 2027 $ (12,000) x 1.2 × = $ (14,400) $ 252,400
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Mercury Company has only one inventory pool. On December 31, 2024, Mercury adopted the dollar-value LIFO inventory method.
The inventory on that date using the dollar-value LIFO method was $200,000. Inventory data are as follows:
Ending Inventory at
Ending Inventory at
Year
2025
2026
2027
Year-End Costs
$ 231,000
299,000
300,000
Base Year Costs
$ 220,000
260,000
250,000
Required:
Compute the inventory at December 31, 2025, 2026, and 2027, using the dollar-value LIFO method.
Note: Round "Year end cost index" to 2 decimal places.
Answer is complete but not entirely correct.
Inventory Layers Converted to Base Year Cost
Year-
Inventory
Ending
Inventory
Date
at Year-
End Cost
End
Cost
Inventory
at Base
at Base
Inventory Layers Converted to Cost
Ending
Inventory
Layers
Converted
Inventory
DVL Cost
Year-
End
Cost
=
Year
Index
Year Cost
Index
to Cost
Cost
12/31/2024
12/31/2025
$ 200,000
+
1
=
$ 200,000
Base
$
200,000
×
1
=
$
200,000
$ 200,000
$231,000
÷
1.05
=
$220,000
Base
$
200,000✓
1
=
$
200,000
12/31/2026
$ 299,000
1.15
=
$ 260,000
12/31/2027
$ 300,000
+
1.2
>
=
$ 250,000
2025 $
Base $
2025 $
2026 $
Base $
223,100 x
×
1.05
=
$
23,100 $ 223,100
200,000
×
1
=
$
200,000
220,000
×
1.05
|=
$
23,100
38,000 X
x
1.15
= $
43,700 $
266,800
200,000✓
x
✓
1
=
$
200,000
2025 $
220,000 ×
×
1.05
=
$
23,100 ×
2026
$
38,000 X
×
1.15
=
$
43,700 x
2027
SA
$
(12,000) x
x
X 1.2
=
$
(14,400) $ 252,400
11
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