Intermediate Accounting
9th Edition
ISBN: 9781259722660
Author: J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher: McGraw-Hill Education
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Textbook Question
Chapter 8, Problem 8.25E
Dollar-value LIFO
• LO8–8
Carswell Electronics adopted the dollar-value LIFO method on January 1, 2018, when the inventory value of its one inventory pool was $720,000. The company decided to use an external index, the Consumer Price Index (CPI), to adjust for changes in the cost level. On January 1, 2018, the CPI was 240. On December 31, 2018, inventory valued at year-end cost was $880,000 and the CPI was 264.
Required:
Calculate the inventory value at the end of 2018 using the dollar-value LIFO method.
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Exercise 8-27 (Static) Dollar-value LIFO [LO8-8]
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- Ending Inventory at Base
End Costs
Date
12/31/2024
12/31/2025
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.
12/31/2026
$ 231,000
299,000
300,000
12/31/2027
Year Costs
Inventory
at Year-
End Cost
$ 220,000
260,000
250,000
Inventory Layers Converted to Base Year Cost
Year-End
Cost
Index
=
=
Ending
Inventory at
Base Year
Cost
Base
Base
2025
Base
2025
2026
Base
2025
2026
2027
Inventory Layers Converted to Cost
Ending
Inventory at
Base Year
Cost
Year-End
Cost
Index
Inventory
Layers
Converted to
Cost
Inventory DVL
Cost
$
$
$
S
0
0
0
0
Exercise 8-26 (Algo) Dollar-value LIFO [LO8-8]
On January 1, 2024, a Company adopted the dollar-value LIFO method for its one inventory pool. The pool's value on this date was
$670,000. The 2024 and 2025 ending inventory valued at year-end costs were $714,000 and $795,000, respectively. The appropriate
cost indexes are 1.05 for 2024 and 1.06 for 2025.
Required:
Complete the below table to calculate the inventory value at the end of 2024 and 2025 using the dollar-value LIFO method.
Note: Round "Year end cost index" to 2 decimal places. Round other final answer values to the nearest whole dollars.
Date
01/01/2024
12/31/2024
12/31/2025
Inventory Layers Converted to Base Year Cost
Inventory at
Year-End
Cost
Year-End
Cost
Index
=
=
=
Inventory
Layers at
Base Year
Cost
Base
Base
2024
Base
2024
2025
Inventory Layers Converted to Cost
Inventory
Layers at Base
Year Cost
Year-End
Cost Index
=
=
=
=
=
Inventory
Layers
Converted to
Cost
Inventory
DVL Cost
S
S
S
0
0
0
Problem 8-15 (Algo) Dollar-value LIFO [LOB-8]
On January 1, 2024, a company adopted the dollar-value LIFO inventory method. The inventory value for its one inventory pool on this
date was $270,000. An internally generated cost index is used to convert ending inventory to bese year. Year-end Inventories at year-
end costs and cost indexes for its one inventory pool were as follows:
Year Ended
December 31
2024
2025
2026
Inventory Year- Cost Index (Relative
End Costs
$354,640
365,040
413,110
141,840
to Base Year)
1.04
1.08
1.09
Required:
Calculate inventory amounts at the end of each year
Note: Round intermediate calculations and final answers to the nearest whole dollars.
Date
Inventory Layers Converted to Base Year
Cost
Inventory at Year-End
Inventory
Cost
Index
Layers at Base
Year Cost
Year-End
Cost
01012024
12/31/2024
12012025
12012026
Inventory Layers Converted to Cost
Inventory DVL
Cost
Inventory
Layers at
Year-
Inventory
End
Cost
Layers
Converted to
Cost
Index
Cost
Base
2024
Base…
Chapter 8 Solutions
Intermediate Accounting
Ch. 8 - Describe the three types of inventory of a...Ch. 8 - What is the main difference between a perpetual...Ch. 8 - The Cloud Company employs a perpetual inventory...Ch. 8 - The Bockner Company shipped merchandise to Laetner...Ch. 8 - What is a consignment arrangement? Explain the...Ch. 8 - Prob. 8.6QCh. 8 - The Esquire Company employs a periodic inventory...Ch. 8 - Prob. 8.8QCh. 8 - Its common in the electronics industry for unit...Ch. 8 - Explain why proponents of LIFO argue that it...
Ch. 8 - Prob. 8.11QCh. 8 - Describe the ratios used by financial analysts to...Ch. 8 - Prob. 8.13QCh. 8 - Prob. 8.14QCh. 8 - The Austin Company uses the dollar-value LIFO...Ch. 8 - Identify any differences between U.S. GAAP and...Ch. 8 - Determining ending inventory; periodic system ...Ch. 8 - Prob. 8.2BECh. 8 - Prob. 8.3BECh. 8 - Purchas e discounts; gross method LO83 On...Ch. 8 - Prob. 8.5BECh. 8 - Prob. 8.6BECh. 8 - Inventor y cost flow methods; perpetual system ...Ch. 8 - LIFO method LO84 Esquire Inc. uses the LIFO...Ch. 8 - LIFO method LO84 AAA Hardware uses the LIFO...Ch. 8 - LIFO liquidation LO86 Refer to the situation...Ch. 8 - Prob. 8.11BECh. 8 - Ratio analysis LO87 Selected financial statement...Ch. 8 - Dollar-value LIFO LO88 At the beginning of 2018,...Ch. 8 - Perpetual inventory system; journal entries LO81...Ch. 8 - Prob. 8.2ECh. 8 - Determining cost of goods sold; periodic inventory...Ch. 8 - Perpetual and periodic inventory systems compared ...Ch. 8 - Prob. 8.6ECh. 8 - Goods in transit; consignment LO82 The December...Ch. 8 - Physical quantities and costs included in...Ch. 8 - Prob. 8.9ECh. 8 - Prob. 8.10ECh. 8 - Prob. 8.11ECh. 8 - FASB codification research LO82, LO83 Access the...Ch. 8 - Inventory cost flow methods; periodic system ...Ch. 8 - Inventory cost flow methods; perpetual system ...Ch. 8 - Comparison of FIFO and LIFO; periodic system ...Ch. 8 - Average cost method; periodic and perpetual...Ch. 8 - FIFO, LIFO, and average cost methods LO81, LO84...Ch. 8 - Supplemental LIFO disclosures; LIFO reserve; AEP...Ch. 8 - LIFO liquidation LO81, LO84, LO86 The Reuschel...Ch. 8 - Dollar-value LIFO LO88 On January 1, 2018, the...Ch. 8 - Dollar-value LIFO LO88 Mercury Company has only...Ch. 8 - Dollar-value LIFO LO88 Carswell Electronics...Ch. 8 - Concepts; terminology LO81 through LO85 Listed...Ch. 8 - Various inventory transactions; journal entries ...Ch. 8 - Prob. 8.2PCh. 8 - Prob. 8.4PCh. 8 - Various inventory costing methods LO81, LO84...Ch. 8 - Various inventory costing methods LO81, LO84...Ch. 8 - Supple mental LIFO disclosures; Caterpillar LO84,...Ch. 8 - LIFO liquidation LO84, LO86 Taylor Corporation...Ch. 8 - LIFO liquidation LO84, LO86 Cansela Corporation...Ch. 8 - Prob. 8.11PCh. 8 - Integrating problem; inventories and accounts...Ch. 8 - Dollar-value LIFO LO88 On January 1, 2018, the...Ch. 8 - Dollar-value LIFO LO88 Kingston Company uses the...Ch. 8 - Dollar-value LIFO LO88 On January 1, 2018,...Ch. 8 - Prob. 8.1BYPCh. 8 - Real World Case 82 Physical quantities and costs...Ch. 8 - Judgment Case 83 The specific identification...Ch. 8 - Prob. 8.4BYPCh. 8 - Prob. 8.5BYPCh. 8 - Judgment Case 86 Goods in transit LO82 At the end...Ch. 8 - Ethics Case 87 Profit manipulation LO84 In 2017...Ch. 8 - Real World Case 88 Effects of inventory valuation...Ch. 8 - Real World Case 89 Effects of inventory valuation...Ch. 8 - Communication Case 810 Dollar-value LIFO method ...Ch. 8 - Prob. 8.11BYPCh. 8 - Prob. 8.CCTCCh. 8 - Prob. CCIFRS
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