dollar_value_LIFO_solution

dollar_value_LIFO_solution - Solution: Dollar‐Value LIFO...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Solution: Dollar‐Value LIFO 2010 January 1 500,000 (DVL base) Inventory 1.00 Index Ending inventory at base‐year costs (556,500/1.05) Less: Beginning inventory Layer added in 2010 Converted to acquisition‐year costs Ending inventory = Beginning inventory at DVL Add: 2010 layer at current costs Ending inventory (12/31/10) at DVL cost December 31 556,500 1.05 530,000 (500,000) 30,000 X 1.05 31,500 500,000 31,500 531,500 2011 January 1 531,500 (at DVL cost) Inventory 530,000 (at base‐year costs) 1.05 Index Ending inventory at base‐year costs (596,200/1.10) Less: Beginning inventory at base‐year costs Layer added in 2011 Converted to acquisition‐year costs Ending inventory = Beginning inventory at DVL cost Add: 2011 layer at current cost Ending inventory (12/31/11) at DVL cost December 31 596,200 1.10 542,000 (530,000) 12,000 X 1.10 13,200 531,500 13,200 544,700 2012 January 1 544,700 (at DVL cost) Inventory 542,000 (at base‐year costs) 1.10 Index Ending inventory at base‐year costs (612,250/1.15) Less: Beginning inventory at base‐year costs Layer subtracted in 2012 all from 2011 layer Net 2011 layer (12,000 – 7,000) Converted to acquisition‐year costs (using 2011 index) Ending inventory = Beginning inventory at DVL cost (2010 layer only) Add: Remaining 2011 layer at current cost Ending inventory (12/31/12) at DVL cost December 31 615,250 1.15 535,000 (542,000) (7,000) 5,000 X 1.10 5,500 531,500 5,500 537,000 2013 January 1 537,000 (at DVL cost) Inventory 535,000 (at base‐year costs) 1.15 Index Ending inventory at base‐year costs (720,000/1.25) Less: Beginning inventory at base‐year costs Layer added in 2013 Converted to acquisition‐year costs Ending inventory = Beginning inventory at DVL cost Add: 2013 layer at current cost Ending inventory (12/31/13) at DVL cost December 31 720,000 1.25 542,000 (535,000) 41,000 X 1.25 51,250 537,000 51,250 588,250 ...
View Full Document

This note was uploaded on 09/09/2011 for the course TAX 6845 taught by Professor Kelliher,c during the Fall '08 term at University of Central Florida.

Ask a homework question - tutors are online