Jennifer Inc. adopted dollar-value LIFO on December 31, 2010. Data for 2010-2013 follow:
Inventory and index on the adoption date, December 31, 2010:
Dollar-value LIFO inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $250,000
Price index at year-end (the base year) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.00
Inventory information in succeeding years:
___________________________________________Inventory at........Year-End.......Average
Date..........................................................Year-End Prices....Price Index.....Price Index
Dec. 31, 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......$314,720..............1.12...........1.04
Dec. 31, 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..........361,800..............1.20...........1.14
Dec. 31, 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .........353,822.............1.27...........1.20
1. Compute the inventory value at December 31 of each year under the dollar-value method, assuming new layers are valued using the average price index.
2. Compute the inventory value at December 31, 2013, assuming that dollar-value procedures were adopted at December 31, 2011, rather than in 2010. The beginning layer is the December 31, 2011, balance.