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homework%20solutions%20chapter%208b

homework%20solutions%20chapter%208b - E8-12 Date 8-18...

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Date Ending Inventor y At Current     Costs         x Base Year Cost Index Current Cost Index = Inventory At Base-Ye ar         Costs             Increase (Decreas e)  at Base-Yea r         Costs               x Relevant Cost Index Base-Year Cost Index = Increase (Decreas e)  at Relevant Current       Costs           Ending Inventory at      LIFO           Layers in LIFO Ending Inventory 12/31/06 $40,00 0        -- x            -- = -- $40,000 $40,000 12/31/07 $56,10 0 x 120 100 = 46,750 $6,750  x 100 120 = $8,100 48,100 40,000 ($40,[email protected]) 8,100 ($  6,[email protected]) 12/31/08   58,50 0 x 130 100 = 45,000 (1,750) x 100 120 = (2,100) 46,000 40,000 ($40,[email protected]) 6,000 ($  5,[email protected]) 12/31/09   70,00 0 x 140 100 = 50,000 5,000  x 100 140 =   7,000 53,000 40,000 ($40,[email protected]) 6,000 ($  5,[email protected]) 7,000 ($  5,[email protected]) E8-12 8-18
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P8-8   (AICPA adapted solution) 1. GROVER COMPANY Computation of Inventory for Class F Inventory Pool Under LIFO Method December 31, 2007 Units Weighted average unit cost Total cost Base year inventory–2004 Incremental layer–2005 (Portion) Inventory, December 31, 2007 (Schedule 1)   9,000   2,000 11,000     $10.00       11.00 $  90,000     22,000 $112,000 Schedule 1 :  Computation of Units in Inventory for Class F Inventory Pool    Units Inventory, December 31, 2006   14,000 Add:  Purchases during 2007 (4,800 + 7,200)   12,000 Inventory available for use   26,000 Deduct:  Units used for production during 2007  (15,000 ) Inventory, December 31, 2007   11,000 2. GROVER COMPANY Computation of Cost of Class F Raw Materials Used in Production Under LIFO Method For Year Ended December 31, 2007 Units Unit cost Total cost From purchase of September 1, 2007 From purchase of March 1, 2007 From incremental layer--2006 From incremental layer–2005 (Portion) Used in production during 2007   7,200   4,800   2,000   1,000 15,000     $14.00       13.50       12.50       11.00 $100,800     64,800     25,000     11,000 $201,600 8-2
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