Question

The following information relates to the Pina Company. Date December 31, 2013 December 31, 2014 December 31, 2015 December 31, 2016 December 31, 2017 Ending Inventory (End-of-Year Prices) $ 65,400 107,690 115,976 130,410 121,104 Price Index 100 121 133 138 144 Use the dollar-value LIFO method to compute the ending inventory for Pina Company for 2013 through 2017. Ending Inventory 2013 2014 2015 2016 2017

Answer 1

Calculation of Ending inventory at dollar value LIFO method for 2013 through 2017.

Date	Ending inventory	Price index	Inventory (base year cost)	Increment
Dec 31,2013	$65,400	100	65,400/1.00=65,400	-
Dec 31,2014	$107,690	121	107,690/1.21=89,000	$23,600
Dec 31,2015	$115,976	133	115,976/1.33=87,200	($1,800)
Dec 31,2016	$130,410	138	130,410/1.38=94,500	$7,300
Dec 31,2017	$121,104	144	122,104/1.44=84,100	($10,400)

Dollar-Value LIFO

Date	Layer at base year × price index	Ending inventory at LIFO
Dec 31,2013	65,400×1.00	$65,400
Dec 31,2014	65,400×1.00+23,600×1.21	$93,956
Dec 31,2015	65,400×1.00+21,800×1.21+0	$91,778
Dec 31,2016	65,400×1.00+21,800×1.21+7,300×1.38	$101,852
Dec 31,2017	65,400×1.00+18,700×1.21+0+0	$88,027

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