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The Hazim Company is a wholesale distributor of automotive replacement parts. For purposes of this question, assume...

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Accounting

The Hazim Company is a wholesale distributor of automotivereplacement parts. For purposes of

this question, assume on January 1, year 3, Hazim Co. adoptedthe dollar-value LIFO method of

determining inventory costs for financial and income-taxreporting. The following information relates

to this change:

Hazim has continued  to use the FIFO method forinternal reporting purposes. Hazim's FIFO

inventories at December 31, Year 3, Year 4, and Year 5, were$100,000, $137,500, and $195,000,

respectively.

The FIFO inventory amounts are converted to dollar-value LIFOamounts using a single inventory

pool and annual cost indexes. Hazim uses the annual indexesdeveloped by its industry trade

association: 1.25 for year 4 and 1.50 for year 5.

Calculate Hazim's dollar-value LIFO inventory at December 31,Year 4 and Year 5. Show all

calculations

Answer & Explanation Solved by verified expert
3.8 Ratings (499 Votes)
Solution Calculation of Dollar value LIFO Inventory on December 31st for the Year 4th and year 5th Year stage Year end Inventory Value as    See Answer
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