Question 1. Corporation adopted the dollar-value LIFO method of inventory valuation on December 31, 2006. Its inventory at that date was $220,000 and the relevant price index was 100. Information regarding inventory for subsequent years is as follows:
Inventory at Current
Date Current Prices Price Index
December 31, 2007 $256,800 107
December 31, 2008 290,000 125
December 31, 2009 325,000 130
a) What is the cost of the ending inventory at December 31, 2007 under dollar-value LIFO?
b) What is the cost of the ending inventory at December 31, 2008 under dollar-value LIFO?
Question 2. The following information is available for October for Jordan Company.
Beginning inventory $ 50,000
Net purchases 150,000
Net sales 300,000
Percentage markup on cost 66.67%
A fire destroyed Jordan's October 31 inventory, leaving undamaged inventory with a cost of $3,000. Using the gross profit method, the estimated ending inventory destroyed by fire is?