Question

Dollar-Value LIFO On January 1, 2018, Sato Company adopted the dollar-value LIFO method of inventory costing. Sato's ending inventory records appear as follows: Year Current Cost Index 2018 $40,000 100 2019 56,100 120 2020 58,500 130 2021 70,000 140 Required: Compute the ending inventory for the years 2018, 2019, 2020, and 2021, using the dollar-value LIFO method. Do not round your intermediate calculations. If required, round your answers to the nearest dollar. Year Ending inventory 2018 $ 2019 $ 2020 $ 2021 $

Answer 1

40,000 ; 48100 ; 46000 ; 53000

Step-by-step explanation:

Year Current(A) Cost Index(B) base amount(A/B) change from prior year

2018 $40,000 1.00 40000 0

2019 56,100 1.20 46750 6750

2020 58,500 1.30 45000 (1750)

2021 70,000 1.40 50000 5000

Year 2018 = $40,000

Year 2019:

$40000 × 1.00 = $40,000

$6750 × 1.20 = 8100

$40,000 + 8100 = $48100

Year 2020:

$40000 × 1.00 = $40,000

($6750 - $1,750 = $5000) × 1.20 = $6,000

40000 + 6000 =$46000

Year 2021 :

$40,000 × 1.00 =$40,000

($6750 - $1750 = $5000) × 1.20 = $6000

$5000 × 1.40 = $7000

40000 + 6000 + 7000 =$53000