Answer:
2017 $1,250,000
2018 $1,512,500
2019 $1,439,000
2020 $1,637,900
Explanation:
The computation of ending inventory is shown below:-
Year Inventory Price index Inventory at base Change from prior
at end year year years
2017 $1,250,000 100 $1,250,000 0
2018 $1,575,000 105 $1,500,000 $250,000
2019 $1,573,000 110 $1,430,000 ($70,000)
2020 $1,872,000 117 $1,600,000 $170,000
Inventory at base year prices
2017 = $1,250,000 ÷ 100 × 100 = $1,250,000
2018 = $1,575,000 ÷ 105 × 100 = $1,500,000
2019 = $1,573,000 ÷ 110 × 100 = $1,430,000
2020 = $1,872,000 ÷ 117 × 100 = $1,600,000
So, dollar value ending inventory
2017 $1,250,000 × 1.0 = $1,250,000
$1,250,000
2018 $1,250,000 × 1.0 = $1,250,000
$250,000 × 1.05 = $262,500
$1,512,500
2019 $1,250,000 × 1.0 = $1,250,000
($250,000 - $70,000) × 1.05 = $189,000
$1,439,000
2020 $1,250,000 × 1.0 = $1,250,000
($250,000 - $70,000) × 1.05 = $189,000
$170,000 × 1.17 = $198,900
$1,637,900
2017 $1,250,000
2018 $1,512,500
2019 $1,439,000
2020 $1,637,900
