On January 1, 2024, a company adopted the dollar-value LIFO method. The inventory value for its one inventory pool on this date was $430,000. Inventory data for 2024 through 2026 are as follows: Date 12/31/2024 12/31/2025 12/31/2026 Date 01/01/2024 12/31/2024 Required: Calculate the company's ending inventory for 2024, 2025, and 2026. 12/31/2025 Ending Inventory at Year-End Costs 12/31/2026 $ 477,000 520,800 536,900 Cost Index 1.06 1.12 1.18 Inventory at Year-End Cost Inventory Layers Converted to Base Year Cost Inventory Layers at Base Year Cost Year-End Cost Index = = = = 11 Base Base 2024 Base 2024 2025 Base 2024 2025 2026 Inventory Layers Converted to Cost Year-End Cost Index Inventory Layers at Base Year Cost || 11 11 11 |||| 11 11 Inventory Layers Converted to Cost Inventory DVL Cost S S S S 0 O

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Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.