Sheffield Corp. adopted the dollar-value LIFO method of inventory valuation on December 31, 2019. Its inventory at that date was

Question

3 years ago

7

Sheffield Corp. adopted the dollar-value LIFO method of inventory valuation on December 31, 2019. Its inventory at that date was

$1010000 and the relevant price index was 100. Information regarding inventory for subsequent years is as follows: Date Inventory at Current Prices Current Price Index December 31, 2020 $1287000 106 December 31, 2021 1429000 124 December 31, 2022 1627000 129 What is the cost of the ending inventory at December 31, 2020 under dollar-value LIFO

Business

1 answer:

Solnce55 [7] · Answer 1 · 2022-10-08T11:07:11+03:00

Answer: $1226400

Explanation:

The cost of the ending inventory at December 31, 2020 under dollar-value LIFO will be calculated as:

= $1010000 + [($1287000/106 × 100) - $1010000] × 106/100

= $1010000 + ($1214151.4 - $1010000) × 1.06

= $1010000 + ($204150.94 × 1.06)

= $1010000 + $216400

= $1226400

Therefore, the cost of the ending inventory at December 31, 2020 under dollar-value LIFO is $1226400.