Exercise-4 (Ending inventory using dollar value LIFO method)

By: Rashid Javed | Updated on: September 7th, 2022

The Rehan Company presents you the following data:

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Required: Compute the value of inventory on December 31, 2015 and December 31, 2016 using dollar-value LIFO method.

Solution:

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*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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