An aging of a company's accounts receivable indicates that the estimate of uncollectible receivables totals $4,705. If Allowance
1 answer:
You might be interested in
Answer:
When using dollar-value LIFO, the ending inventory at current year cost must first be converted to base year cost. The 12/31/Y2 inventory at base year cost is given as $60,000. Since the 12/31/Y1 inventory at base year cost was $45,000 ($40,000 base layer and $5,000 year 1 layer), a new layer of $15,000 was added in year 2 ($60,000 − $45,000). This layer must be restated using the year 2 price index. The year 2 price index is computed using the double-extension technique, as illustrated below.
