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Oriole Company adopted the dollar-value LIFO method of inventory valuation on December 31, 2019. Its inventory...

Oriole Company adopted the dollar-value LIFO method of inventory valuation on December 31, 2019. Its inventory at that date was $1105000 and the relevant price index was 100. Information regarding inventory for subsequent years is as follows:

Date Inventory at
Current Prices		 Current
Price Index
December 31, 2020 $1274000 107
December 31, 2021   1448000 125
December 31, 2022   1620000 130


What is the cost of the ending inventory at December 31, 2021 under dollar-value LIFO?

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Answer #1

Answer:

December 2020

Inventory at base price:

= 12,74,000/107

= 11,90,654

Increase in the inventory:

= 11,90,654 - 1105000

= 85,654

Inventory:

1105000 + (85,654)1.07

= 11,96,649.78

=============================================================

December 2021

Inventory at base price:

=14,48,000/125

=11,58,400

Decrease in inventory:

= 11,90,654 - 11,58,400

= 32,254

Inventory:

= 1105000 + (85,654 - 32,254)1.07

= 11,05,000+57,138

= 11,62,138

Therefore,cost of the ending inventory at December 31, 2021 $ 11,62,138 under dollar vaue LIFO.

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