Nash Company cans a variety of vegetable-type soups. Recently, the company decided to value its inventories...

70.2K

Verified Solution

Question

Accounting

Nash Company cans a variety of vegetable-type soups. Recently,the company decided to value its inventories using dollar-valueLIFO pools. The clerk who accounts for inventories does notunderstand how to value the inventory pools using this new method,so, as a private consultant, you have been asked to teach him howthis new method works.

He has provided you with the following information about purchasesmade over a 6-year period.
Date
Ending Inventory
(End-of-Year Prices)
Price Index
Dec. 31, 2013
$72,900
100
Dec. 31, 2014
136,896
124
Dec. 31, 2015
133,906
142
Dec. 31, 2016
158,202
153
Dec. 31, 2017
180,345
165
Dec. 31, 2018
213,921
171
You have already explained to him how this inventory method ismaintained, but he would feel better about it if you were to leavehim detailed instructions explaining how these calculations aredone and why he needs to put all inventories at a base-yearvalue.

Compute the ending inventory for Richardson Company for 2013through 2018 using dollar-value LIFO.
Ending inventory:
2013
2014
2015
2016
2017
2018

Answer & Explanation Solved by verified expert

3.5 Ratings (449 Votes)

Dollar value LIFO method is used when the prices of the inventory is not stable and is fluctuating from one period to another If the prices are fluctuating then simply deducting sales from goods available for sale and computing ending inventory is not correct In this method the ending See Answer

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:

Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!

Become a Member

Date	Ending Inventory (End-of-Year Prices)		Price Index
Dec. 31, 2013		$72,900	100
Dec. 31, 2014		136,896	124
Dec. 31, 2015		133,906	142
Dec. 31, 2016		158,202	153
Dec. 31, 2017		180,345	165
Dec. 31, 2018		213,921	171