Question

On January 1, 2021, the Taylor Company adopted the dollar-value LIFO method. The inventory value for its one inventory pool on this date was $300,000. Inventory data for 2021 through 2023 are as follows: Date Ending Inventory at Year-End Costs Cost Index 12/31/2021 $ 332,800 1.04 12/31/2022 368,500 1.10 12/31/2023 383,500 1.18 Required: Calculate Taylor's ending inventory for 2021, 2022, and 2023.

Answer 1

Answer and Explanation:

The computation of the ending inventory for the year 2021, 2022 and 2023 is shown in the attachment below

It is to be divided into two parts

1. Inventory converted to the base year in which the base year is considered by taking the cost index  

2. Inventory converted to cash in which the inventory converted to the base year, cost index is considered so that the inventory converted to cash could come plus the value of the inventory using the LIFO method also comes