contestada

Presented below is information related to Teal Mountain , Inc. Date End-of-Year Inventory (End-of-Year Prices) Price Index December 31, 2017 $1,250,000 100 December 31, 2018 1,575,000 105 December 31, 2019 1,573,000 110 December 31, 2020 1,872,000 117 Compute the ending inventory for Teal Mountain , Inc. for 2017 through 2020 using the dollar-value LIFO method.

Respuesta :

Answer:

2017   $1,250,000

2018   $1,512,500

2019   $1,439,000

2020   $1,637,900

Explanation:

The computation of ending inventory is shown below:-

Year        Inventory       Price index   Inventory at base    Change from prior

               at end year                               year                         years

2017        $1,250,000     100                    $1,250,000               0

2018       $1,575,000      105                     $1,500,000           $250,000

2019        $1,573,000     110                      $1,430,000            ($70,000)

2020       $1,872,000     117                       $1,600,000           $170,000

Inventory at base year prices

2017 = $1,250,000 ÷ 100 × 100 = $1,250,000

2018 = $1,575,000 ÷ 105 × 100 = $1,500,000

2019 = $1,573,000 ÷ 110 × 100 = $1,430,000

2020 = $1,872,000 ÷ 117 × 100 = $1,600,000

So, dollar value ending inventory

2017        $1,250,000 × 1.0 = $1,250,000

                                               $1,250,000

2018        $1,250,000 × 1.0 = $1,250,000

               $250,000 × 1.05 = $262,500

                                               $1,512,500

2019        $1,250,000 × 1.0 = $1,250,000

($250,000 - $70,000) × 1.05 = $189,000

                                                   $1,439,000

2020       $1,250,000 × 1.0 = $1,250,000

($250,000 - $70,000) × 1.05 = $189,000

                     $170,000 × 1.17 = $198,900

                                                   $1,637,900

2017   $1,250,000

2018   $1,512,500

2019   $1,439,000

2020   $1,637,900