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 $

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Business

Alena

29 September, 04:27

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 $

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Wheeler · Answer 1

40,000; 48100; 46000; 53000

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