Question

Buckeye Corporation adopted dollar-value LIFO on January 1, 2021, when the inventory value was $514,000 and the cost index was 1.00. On December 31, 2021, the inventory value at year-end costs was $549,000 and the cost index was 1.04. Buckeye would report a LIFO inventory of:

Answer 1

Answer:

$528,440

Explanation:

For computing the amount of inventory under LIFO method, first we have to determine the December 31 value based on the cost index which is shown below:

= Inventory value on January 1, 2021 × cost index

= $514,000 × $1.04

= $534,560

The difference would be

= $549,000 - $534,560

= $14,440

This amount reflect the increase in value

So, the inventory would be reported at

= Inventory value on January 1, 2021 + increase value

= $514,000 + $14,440

= $528,440