Chapter 8, Problem 9BE

To determine

Introduction: The following steps are adopted in the dollar value LIFO method:

1. Base year value is determined. Inflation index is measured with reference to this year.

2. Ending inventory is computed as per base year value and inflation or price index is applied.

3. The values in above steps are compared and the increase or decrease in value is calculated.

4. The values are reinstated as per current year prices after determining the change in values.

5. Ending inventory value is computed by adding the values in layers.

To compute: The inventories value using the dollar-value LIFO method.