Question

Waterway Industries adopted the dollar-value LIFO method of inventory valuation on December 31, 2019. Its inventory at that date was $1080000 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 $1280000 106 December 31, 2021 1453000 124 December 31, 2022 1621000 129 What is the cost of the ending inventory at December 31, 2020 under dollar-value LIFO? (Round intermediate calculations and final answer to 0 decimal places, e.g. 10,000.)

Answer 1

Answer:

$1,373,408

Explanation:

Ending inventory in 2019 = $1,080,000 * 100/100 = $1,080,000

Cost of the ending inventory at December 31, 2020 under dollar-value LIFO is:

= $1,080,000 + [($1280000*106/100) - $1,080,000 ] * 106/100

= $1,080,000 + $293,408

= $1,373,408