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Exercise 9-27 Presented below is information related to Sandhill Corporation. Price Index LIFO Cost Retail Inventory on...

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Accounting

Exercise 9-27

Presented below is information related to Sandhill Corporation.Price Index LIFO Cost Retail Inventory on December 31, 2017, whendollar-value LIFO is adopted 100 $36,600 $69,100 Inventory,December 31, 2018 110 ? 95,260 Compute the ending inventory underthe dollar-value LIFO method at December 31, 2018. Thecost-to-retail ratio for 2018 was 60%. Ending inventory under thedollar-value LIFO method at December 31, 2018

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Computation of ending Inventory under LIFO Method at December 31, 2018:
First Layer = $                        36,600
Second Layer = $                        11,550
Ending Inventory at December 31, 2018 = $                        48,150
At retail:
Ending Inventory ($95260/1.10) = $                        86,600
Less: Beginning Inventory = $                        69,100
Incremental Difference = $                        17,500
Under LIFO:
Second Layer = $17500 X 1.10 X 60%
= $                        11,550

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