Answer:
Inventory 2017 dollar-value LIFO $ 1215,000
Inventory 2017 dollar-value LIFO $ 1675,000
Inventory 2017 dollar-value LIFO $ 1583,000
Explanation:
Aber Company
Year Inventory at Price index Ending Inventory
year-end prices (base year 2016) At base year
2017 $1,260,000 1.05 $1200,000
2018 1,840,000 1.15 $ 1600,000
2019 1,900,000 1.25 $1520,000
Calculations
2017 Ending Inventory at base year price = $1,260,000 / 1.05
=$1200,000
2018 Ending Inventory at base year price = 1,840,000/ 1.15 =$ 1600,000
2019 Ending Inventory at base year price = 1,900,000 /1.25= $ 1520,000
<em>We multiply each layer added with the price indices given to get the LIFO value dollar of inventory</em>
Ending Inventory Layers Inventory
At base year Added LIFO dollar-value
$1200,000 300,000 900,000 at base year price
315,000
1215,000
$ 1600,000 700,000 900,000 at base price
300,000 at 1.05 315,000
400,000 at 1.15 460,000
1675,000
$1520,000 620,000 900,000 at base price
300,000 at 1.05 315,000
3200,000 at 1.15 368,000
1583,000
Computation of Inventory at 2017
Layer= $1200,000- $900,000= 300,000
Inventory at base = $900,000
$300,000 at 1.05= $315,000
Inventory at 2017 = 1215,000
Computation of Inventory at 2018
Layer= $1600,000- $900,000= 700,000
Inventory at base = $900,000
$300,000 at 1.05= $315,000
$400,000 at 1.15= $ 460,000
Inventory at 2018 = 1675,000
Computation of Inventory at 2017
Layer= $1520,000- $900,000= 620,000
Inventory at base = $900,000
$300,000 at 1.05= $315,000
$ 320,000 at 1.15= $ 368,000
Inventory at 2017 = 1583,000
