Inventory

Question 1

How to calculate the dollar value LIFO ending inventory?

Answer 1

To calculate the LIFO ending inventory, it is the dollar value base layer plus the current year base layer times the conversion factor.
(1) Start with the base value from the beginning 1/1 (dollar value base layer).
(2) Add the value of the current year’s inventory (current year base layer).
(3) Multiply the total by the conversion factor (Current year/base year) to get the ending inventory dollar value LIFO.

Question 2

What method would result in the lowest ending inventory when its product lines are subject to specific price increases?

Answer 2

Dollar-value LIFO

Question 3

What application of the lower cost or market results in the lowest inventory amount?

Answer 3

Separately to each item