Intermediate Accounting (2nd Edition)
2nd Edition
ISBN: 9780134730370
Author: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella
Publisher: PEARSON
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Textbook Question
Chapter 10, Problem 10.8E
Dollar-Value LIFO, LIFO Reserve. CWB Teleconcepts, Inc. manufactures and distributes three models of handheld devices the Flame, the Globe, and the HD3 CWB uses the dollar-value UFO method information for 2018, 2019, and 2020 is presented in the following table.
| Description | Base Year 2018 | 2019 | 2020 | |||
| Inventory | Units | Total FIFO Cost | Units | Total FIFO Cost | Units | Total FIFO Cost |
| Flame | 5,000 | $450,000 | 7000 | $658,000 | 4.000 | $392,000 |
| Globe | 6,000 | 660,000 | 5,000 | 580,000 | 3.000 | 375,000 |
| HD3 | 3,000 | 450,000 | 5,000 | 800,000 | 1.000 | 170,000 |
The cumulative price indices for 2018, 2019, and 2020, respectively are 1.00, 1 056, and 1.1155.
Required
- a. Compute the company s ending inventory using dollar-value LIFO tor each year. Treat the three models as one group. Round to the nearest dollar,
- b. Prepare the
journal entry required to adjust the LIFO reserve for each year.
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Chapter 10 Solutions
Intermediate Accounting (2nd Edition)
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