Problem 4

PLEASE COMPLETE YOUR ANSWERS IN THE TABLES BELOW OR FOLLOW THE TABLES TEMPLATE

Frederick Company adopted the dollar-value LIFO method on January 1, 2015 (using internal price indexes and multiple pools). The following data are available for inventory pool A for the 2 years following adoption of LIFO.

At Base- At Current- Price

Inventory Year Cost Year Cost Index

1/1/15 $100,000 $100,000 100

12/31/15 120,000 126,000 105

12/31/16 128,000 143,360 112

Using the dollar-value LIFO method, at what amount should the inventory be reported at December 31, 2016?

Problem 4

Computation of price indexes:

12/31/15

12/31/16

Dollar-value LIFO inventory 12/31/15:

Dollar-value LIFO inventory

Dollar-value LIFO inventory 12/31/16:

Dollar-value LIFO inventory