INTERMEDIATE ACCOUNTING (LL) W/CONNECT
9th Edition
ISBN: 9781260679694
Author: SPICELAND
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Videos
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.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
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 (LL) W/CONNECT
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
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Exercise 8-27 (Algo) Dollar-value LIFO [LO8-8] Mercury Company has only one inventory pool. On December 31, 2021, Mercury adopted the dollar-value LIFO inventory method. The inventory on that date using the dollar-value LIFO method was $201,000. Inventory data are as fpllows: Ending Inventory at Year-End Costs Ending Inventory at Year Base Year Costs 2022 $233,100 302,450 $222,000 263,000 253,000 2023 2024 303,600 Required: Compute the inventory at December 31, 2022, 2023, and 2024, using the dollar-value LIFO method. (Round "Year end cost index" to 2 decimal places.) O Answer is not complete. Inventory DVL Cost Inventory Layers Converted to Base Year Cost Inventory Layers Converted to Cost Year- Inventory Layers at Base Year Cost Inventory Layers at Base Year Cost Year- Inventory at Year-End Cost End Cost Index End Cost Index Inventory Layers Converted to Cost Date 12/31/2021 201,000 1 IS 201.000 Base 2$ 201,000 1 %3D 24 201,000 $ 201,000 %3D 12/31/2022 233,100 1.05 2$ 222,000 Base IS…arrow_forwardA28arrow_forwardM9arrow_forward
- A9arrow_forwardP 8-14 Dollar-value LIFO LO8-8 Kingston Company uses the dollar-value LIFO method of computing inventory. An external price index is used to convert ending inventory to base year. The company began operations on January 1, 2018, with an inventory of $150,000. Year-end inventories at year-end costs and cost indexes for its one inventory pool were as follows: Year Ended December 31 2018 2019 2020 2021 Ending Inventory at Year-End Costs $200,000 245,700 235,980 228,800 Cost Index (Relative to Base Year) 1.08 1.17 1.14 1.10 Required: Calculate inventory amounts at the end of each year.arrow_forwardSh4arrow_forward
- Problem 8-13 (Algo) Dollar-value LIFO [LO8-8] On January 1, 2024, a company adopted the dollar-value LIFO method. The inventory value for its one inventory pool on this date was $390,000. Inventory data for 2024 through 2026 are as follows: Date 12/31/2024 12/31/2025 12/31/2026 Date Required: Calculate the company's ending inventory for 2024, 2025, and 2026, 01/01/2024 12/31/2024 12/31/2025 Ending Inventory at Year-End Costs $ 430,500 484,500 510,450 12/31/2026 Cost Index 1.05 1.14 1.23 Inventory Layers Converted to Base Year Cost Inventory Layers at Base Year Cost Inventory at Year-End Cost Year-End Cost Index M T a W 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 - M " . Inventory Layers Converted to Cost Inventory DVL Cost $ $ $ $ 0 0 0 0arrow_forwardExercise 9-19 (Static) Dollar-value LIFO retall [LO9-5] On January 1, 2024, the Brunswick Hat Company adopted the dollar-value LIFO retail method. The following data are available for 2024: Beginning inventory Net purchases Net markups Net markdowns Net sales Retail price index, 12/31/2024 Cost $ 71,280 Retail $ 132,000 112,500 255,000 6,000 11,000 232,000 1.04 Required: Calculate the estimated ending inventory and cost of goods sold for 2024 using the information provided. Note: Do not round intermediate calculations. Ending inventory at retail $ 150,000 Ending inventory at cost Cost of goods sold $ 106,776arrow_forwardС23 Jx А B C. D E F G H. K I also need your assistance in claulating the following economic order quantity (Qe) given new data for 2017. Our inventory generally follows Pareto's Law; therefore, I have emphasized controlling those items representing the majority of our inventory activity. One of those items in IV (intravenous) setups. Our current situation is as follows: 2016 Price $50 for each IV setup 50,000 $25 2017 Demand 2017 Operating Cost 2017 Interest 6.25% 2017 Holding Cost $0.50 The IV distributor would like to distribute a new model setup in 2017 at the same price, but he tells us that he is willing to reduce our carrying costs by making monthly deliveries. After discussing this proposal with Ms. Care, I discovered that training will be required for the new setup. Ms. Care believes, and the distributor agrees, that each registered nurse (RN) will be required to attend a 2 hour seminar. I'm not sure where we put this training cost in the total cost formula. Ms. Care tells me…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:Cengage Learning
IAS 29 Financial Reporting in Hyperinflationary Economies: Summary 2021; Author: Silvia of CPDbox;https://www.youtube.com/watch?v=55luVuTYLY8;License: Standard Youtube License