Question

Skysong Company cans a variety of vegetable-type soups. Recently, the company decided to value its inventories using dollar-value LIFO pools. The clerk who accounts for inventories does not understand how to value the inventory pools using this new method, so, as a private consultant, you have been asked to teach him how this new method works.

He has provided you with the following information about purchases made over a 6-year period.

Date		Ending Inventory (End-of-Year Prices)				Price Index
Dec. 31, 2016			$75,300			100
Dec. 31, 2017			119,880			111
Dec. 31, 2018			118,110			127
Dec. 31, 2019			140,760			138
Dec. 31, 2020			160,580			148
Dec. 31, 2021			188,958			154

You have already explained to him how this inventory method is maintained, but he would feel better about it if you were to leave him detailed instructions explaining how these calculations are done and why he needs to put all inventories at a base-year value.

Compute the ending inventory for Skysong Company for 2016 through 2021 using dollar-value LIFO.

Answer 1