Purpose: This exercise illustrates the use of the dollar-value LIFO method. It shows how a decrease in the ending inventory in terms of base prices from one year to the next affects the calculations and then what happens when an increase in the ending inventory at base prices occurs.
Presented below is information related to Tina Argentine Company.
|
Date
|
Ending Inventory
(End of Year Prices)
|
Price Index
(Percentage)
|
|
December 31, 2009
|
$ 160,000
|
100
|
|
December 31, 2010
|
231,000
|
105
|
|
December 31, 2011
|
216,000
|
120
|
|
December 31, 2012
|
247,000
|
130
|
|
December 31, 2013
|
308,000
|
140
|
|
December 31, 2014
|
348,000
|
145
|
Instructions
Compute the ending inventory for Tina Argentine Company for 2009 through 2014 using the dollar-value LIFO method.