Question: Nicky Bisco Products adopted the dollar-value LIFO method using 2022 as the base year for financial reporting purposes. It uses FIFO for its internal books.

Nicky Bisco Products adopted the dollar-value LIFO method using 2022 as the base year for financial reporting purposes. It uses FIFO for its internal books. Information related to Bisco’s inventory follows:

Year 2022 2023 2024 Ending Inventory at End-of-Year Prices per Internal Books

Required

a. Compute Bisco’s ending inventory under the dollar-value LIFO method for the years 2022 through 2024.

b. Prepare the journal entries for 2023 and 2024 to adjust inventory to the dollar-value LIFO basis.

c. Determine the ending balance of the LIFO reserve for 2023 and 2024.

Year 2022 2023 2024 Ending Inventory at End-of-Year Prices per Internal Books $495,000 588,000 612,000 Cumulative Price Index 100 110 112

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