Answered

At Westonci.ca, we connect you with the best answers from a community of experienced and knowledgeable individuals. Get quick and reliable solutions to your questions from a community of experienced experts on our platform. Connect with a community of professionals ready to help you find accurate solutions to your questions quickly and efficiently.

Two years ago Angle Company starting using dollar-value LIFO for costing its inventory. The first year the ending inventory in end-of-year dollars was $180,000 with a price index of 1.0. The second year the inventory was $270,000 and the index was 1.2. The current inventory at end of year prices is $387,000 and the price index is 1.25. Given this information, the ending inventory using dollar-value LIFO is

Sagot :

anthougo

Answer:

Angle Company

Given this information, the ending inventory using dollar-value LIFO is:

= $309,600.

Explanation:

a) Data and Calculations:

Year     Inventory value    Price Index     Inventory Value

                                                               using dollar-value

                                                                          LIFO

1                 $180,000              1.0                $180,000 ($180,000/1.0)

2                 270,000              1.2                 225,000 ($270,000/1.2)

3.                387,000              1.25               309,600 ($387,000/1.25)

b) The Inventory value using dollar-value LIFO converts the inventory value to the base year's value using the price index.  It is an attempt to rebase the dollar value of the current ending inventory, using the changes in the price index.

Thank you for your visit. We're dedicated to helping you find the information you need, whenever you need it. We appreciate your time. Please revisit us for more reliable answers to any questions you may have. Discover more at Westonci.ca. Return for the latest expert answers and updates on various topics.