Exercise-4 (Ending inventory using dollar value LIFO method)
Posted in: Inventory costing methods (exercises)
The Rehan company presents you the following data:
Required: Compute the value of inventory on December 31, 2015 and December 31, 2016 using dollar-value LIFO method.
Solution:
*Inventory at base year prices = Inventory at end of year prices / Price index
- December 31, 2014: $39,500/1.00 = $39,500
- December 31, 2015: $43,416/1.08 = $40,200
- December 31, 2016: $51,870/1.14 = $45,500
Dollar-value LIFO inventory:
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