# Dollar value lifo a starts with ending inventory

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Chapter 7 / Exercise RE7-7
Intermediate Accounting: Reporting and Analysis
Jones/Wahlen
Expert Verified
81.Dollar-value LIFO: A.Starts with ending inventory measured at current costs and recreates LIFO layers for measuring inventory costs.B. Increases the recordkeeping costs of LIFO.C. Only is allowed for internal reporting purposes.D. None of the above is correct.
AACSB: Reflective thinkingBlooms: KnowledgeLearning Objective: 08-08 Determine ending inventory using the dollar-value LIFO inventory method.Level of Learning: EasySpiceland - Chapter 08 #8182.Compared to dollar-value LIFO, unit LIFO is:
AACSB: Reflective thinkingBlooms: KnowledgeLearning Objective: 08-08 Determine ending inventory using the dollar-value LIFO inventory method.Level of Learning: MediumSpiceland - Chapter 08 #8283.Bond Company adopted the dollar-value LIFO inventory method on January 1, 2011. In applying the LIFO method, Bond uses internal cost indexes and the multiple-pools approach. The following data were available for Inventory Pool No. 3 for the two years following the adoption of LIFO:Under the dollar-value LIFO method the inventory at December 31, 2012, should be
AACSB: AnalyticBlooms: ApplicationLearning Objective: 08-08 Determine ending inventory using the dollar-value LIFO inventory method.Level of Learning: HardSpiceland - Chapter 08 #83On January 1, 2011, Badger Inc. adopted the dollar-value LIFO method. The inventory cost on this date was \$100,000. The 2011 ending inventory, valued at year-end costs, was \$126,000. The relative cost index for this inventory in 2011 was 1.05.Spiceland - Chapter 08
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Chapter 7 / Exercise RE7-7
Intermediate Accounting: Reporting and Analysis
Jones/Wahlen
Expert Verified
84.What inventory balance should Badger report on its 12/31/11 balance sheet?
AACSB: AnalyticBlooms: ApplicationLearning Objective: 08-08 Determine ending inventory using the dollar-value LIFO inventory method.Level of Learning: HardSpiceland - Chapter 08 #8485.Suppose that Badger's 2012 ending inventory, valued at year-end costs, was \$143,000 and that the relative cost index for this inventory in 2012 was 1.10. In determining the inventory balance should Badger report in its 12/31/12 balance sheet: A. An additional layer of \$23,000 is added to the 1/1/12 balance.B. An additional layer of \$22,000 is added to the 1/1/12 balance.C.An additional layer of \$11,000 is added to the 1/1/12 balance.D. None of the above is correct.\$143,000 ÷ 1.10 = \$130,000. This includes the previous two layers, the first at \$100,000 and the second at \$20,000, plus another at \$10,000. The third is then brought forward to 12/31/12 by \$10,000 x 1.10 = \$11,000.
AACSB: AnalyticBlooms: ApplicationLearning Objective: 08-08 Determine ending inventory using the dollar-value LIFO inventory method.Level of Learning: HardSpiceland - Chapter 08 #85