Silver Quick adopted LIFO in January 1, 2015, when the inventory had a FIFO cost of $180,000 ($10 per unit). At the end of 2015, inventory consisted of 18,750 units at $12 per unit, and the ending inventory for 2016 consisted of 20,000 units at $15 per unit.
Required:
a.Calculate the cost index to be used for 2015 and 2016 using the link-chain method.
b.Compute the ending inventory for 2015 and 2016 using dollar-value LIFO.

Question

Silver Quick adopted LIFO in January 1, 2015, when the inventory had a FIFO cost of $180,000 ($10 per unit). At the end of 2015, inventory consisted of 18,750 units at $12 per unit, and the ending inventory for 2016 consisted of 20,000 units at $15 per unit.
Required: 
a.Calculate the cost index to be used for 2015 and 2016 using the link-chain method.
b.Compute the ending inventory for 2015 and 2016 using dollar-value LIFO.

Quizplus · Accepted Answer

The Answer of Silver Quick adopted LIFO in January 1, 2015, when the inventory had a FIFO cost of $180,000 ($10 per unit). At the end of 2015, inventory consisted of 18,750 units at $12 per unit, and the ending inventory for 2016 consisted of 20,000 units at $15 per unit.
Required: 
a.Calculate the cost index to be used for 2015 and 2016 using the link-chain method.
b.Compute the ending inventory for 2015 and 2016 using dollar-value LIFO.

Silver Quick Adopted LIFO in January 1, 2015, When the Inventory