The Happenings Company adopted the dollar-value LIFO inventory method on December 31, 2017, when the price index was 1.00. Ending inventory on the date that it adopted dollar-value LIFO follows.

Information related to the year-end prices for the two years after the adoption of dollar-value LIFO is summarized in the following table.

The cumulative price index for 2018 is 1.3385, and the cumulative price index for 2019 is 1.4399. Treat both models as one group.

Required

a. Calculate the Ending inventory for 2018 at dollar-value LIFO and determine the LIFO reserve needed, if any. Prepare the journal entry to record the LIFO reserve.

b. Calculate the Ending inventory for 2019 at dollar-value LIFO and determine the LIFO reserve needed, if any. Prepare the journal entry to record the LIFO reserve.

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Number of Units Total FIFOCost $ 840 Item MAS1840 280 5 950 JAS2307 850 TOTAL $6 790 December 31 Description Yearend pr ces (HIFO) – MAS1840 inventory Year end prices (FIFO) – JAS2307 inventory 2018 2019 $ 2, 100 10,080 $ 2,639 16,800