Brief Exercise 89 Year Ended December 31 Inventory at Curren

Brief Exercise 8-9

Year Ended
December 31

Inventory at
Current-Year Cost

Price
Index

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Brief Exercise 8-9 Carla, Inc. uses the dollar-value LIFO method of computing its inventory. Data for the past 3 years follow. Year Ended December 31 Inventory at Current-Year Cost Price Index 2016 $18,000 100 2017 20,009 107 2018 23,296 112 Compute the value of the 2017 and 2018 inventories using the dollar-value LIFO method. 2017 2018 Inventory under LIFO $ $ LINK TO TEXT Question Attempts: 0 of 3 used SAVE FOR LATER SUBMIT ANSWER

Solution

Date Inventory at Price Inventory Change Current-Year Cost index at base from (%) year price prior year (a) (b) (a)/(b) 2016 18000 100 18000 0 2017 20009 107 18700 700 2018 23296 112 20800 2100 2017 Value of inventory Base year 2016 (18000*1) 18000 Increase 2017 (700*1.07) 749 18749 2018 Value of inventory Base year 2016 (18000*1) 18000 Increase 2017 (700*1.07) 749 Increase 2018 (2100*1.12) 2352 21101