The Happenings Company adopted the dollar- value LIFO inventory method on 12/ 31/ 2015 when the price index was 1.00. Ending inventory on the date that it adopted dollar- value LIFO is presented below.

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

The cumulative price index for 2016 is 1.3385 and the cumulative price index for 2017 is 1.4399. Treat both models as one group.
Required
a. Calculate the Ending inventory for 2016 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 2017 at dollar- value LIFO and determine the LIFO reserve needed, if any. Prepare the journal entry to record the LIFO reserve.

Transcribed Image Text:

Item MAS1840 JAS2307 TOTAL Number of Units 280 850 Total FIFO Cost S 840 5,950 $6.790 December 31 Description Year-end prioes(FIFO)-MAS1840 inventory Yearend prices(FIFO)「AS2307 inventory 2016 S 2,100 $10,080 2017 S 2,639 $16,800