Question

The Bravo Company manufactures a single product. On December 31, 2012 Bravo adopted the dollar-value, LIFO...

The Bravo Company manufactures a single product. On December 31, 2012 Bravo adopted the dollar-value, LIFO inventory method. The inventory on that date using the dollar-value LIFO inventory method was determined to be $500,000. Inventory data for succeeding years are as follows: Year Inventory at Year End Prices Base Year 2012 2012 500,000 1.00; 2013 527,000 1.08; 2014 635,000 1.15; 2015 645,000 1.21. Compute the inventory amount at December 31, 2013, 2014, and 2015 using the dollar value LIFO inventory method for each year. Round all amounts to the nearest dollar

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Answer #1

Inventory at the end of December, 2013 = $487,963

Inventory at the end of December, 2014 = $561,806

Inventory at the end of December, 2015 = $539,822

Workings

Year

Ending inventory

Price Index

Base year price

Change

2012

$500,000

1.00

$500,000

0

2013

$527,000

1.08

$487,963

($12,037)

2014

$635,000

1.15

$552,174

$64,211

2015

$645,000

1.21

$533,058

($19,166)

Inventory at the end of December, 2013

$487,963 @ 1.00 = $487,963

Inventory at the end of December, 2014

$487,963 @ 1.00 = $487,963

[email protected] = 0

$64,211 @ 1.15 = $73,842.65

$487,963 + $73,842.65 = $561,806

Inventory at the end of December, 2015

$487,963 @ 1.00 = $487,963

0 @ 1.08 = 0

$45,095 @ 1.15 = $51,859.25

0 @ 1.21 = 0

$487,963 + $51,859.25 =$539,822

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