Question

Midori Company had ending inventory at end-of-year prices of $100,000 at December 31, 2016; $119,900 at December 31, 2017; and $134,560 at December 31, 2018. The year-end price indexes were 100 at 12/31/16, 110 at 12/31/17, and 116 at 12/31/18. Compute the ending inventory for Midori Company for 2016 through 2018 using the dollar-value LIFO method.

Answer 1

To calculate the ending inventory using the dollar-value LIFO method, multiply the quantities of inventory in each year by the year-end price indexes.

Step-by-step explanation:

The dollar-value LIFO method is used to determine the ending inventory for a company by valuing the inventory at current year-end prices. To calculate the ending inventory using this method, we need to multiply the quantities of inventory in each year by the year-end price indexes.

For Midori Company, the ending inventory for 2016 would be $100,000 (quantity at end-of-year prices) * 100 (year-end price index) / 100 = $100,000.

Similarly, the ending inventory for 2017 would be $119,900 * 110 / 100 = $131,890, and for 2018 it would be $134,560 * 116 / 100 = $156,041.60.