Question

Presented below is information related to Flint Corporation for the last 3 years.

				Base-Year Cost				Current-Year Cost
Item		Quantities in Ending Inventories		Unit Cost		Amount		Unit Cost		Amount
December 31, 2016
A		9,200		$2.22		$20,424		$2.44		$22,448
B		6,200		3.33		20,646		3.94		24,428
C		4,200		5.55		23,310		5.99		25,158
				Totals		$64,380				$72,034
December 31, 2017
A		9,200		$2.22		$20,424		$2.89		$26,588
B		7,000		3.33		23,310		4.16		29,120
C		6,200		5.55		34,410		7.10		44,020
				Totals		$78,144				$99,728
December 31, 2018
A		8,200		$2.22		$18,204		$3.00		$24,600
B		8,200		3.33		27,306		4.44		36,408
C		6,200		5.55		34,410		6.88		42,656
				Totals		$79,920				$103,664

Compute indexes. (Round price index to 0 decimal places, e.g. 162.)

		2016		2017		2018
Index

	Your answer is incorrect. Try again.

Compute the ending inventories under the dollar-value LIFO method for 2016, 2017, and 2018. The base period is January 1, 2016, and the beginning inventory cost at that date was $47,910. (Round answers to 0 decimal places, e.g. 5,620.)

		2016		2017		2018
Ending Inventories		$		$		$

Answer 1

Solution:

1) Computation of indexes :

Index for 2016 :

=$71,034 /$64,380

=$1.12

Index for 2017:

=$99,728 /$78,144

=$1.28

Index for 2018:

=$103,664 /$79,920

=$1.30

2) Ending inventory under dollar value LIFO:

	Base year cost	Index	Dollar value LIFO
December 31,2016
Jan 1,2016 base	$47,910	1.00	$47,910
December 31,2016	$16,470	1.12	$18,446
	$64,380		$66,356
Dec 31,2017
Jan 1 2016 base	$47,910	1.00	$47,910
Dec 31,2016	$16,470	1.12	$18,446
Dec 31,2017	$13,764	1.28	$17,618
	$78,144		$83,974
Dec 31,2018
Jan 1,2016 base	$47,910	1.00	$47,910
Dec 31,2016	$16,470	1.12	$18,446
Dec 31,2017	$13,764	1.28	$17,618
Dec 31,2018	$1,776	1.30	$2,309
	$79,920		$86,283

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