Dollar Value LIFO Inventory Method
The Johnson Manufacturing Company manufactures a single product. The managers, Ron and Ken Johnson, decided on December 31, 2005, to adopt the dollar value LIFO inventory method. The inventory value on that date using the newly adopted dollar value LIFO method was $500,000. Additional information follows:
|
|
Inventory at |
Year End |
|
Date |
Year End Prices |
Price Index |
|
Dec 31, 2006 |
$605,000 |
1.10 |
|
Dec 31, 2007 |
597,360 |
1.14 |
|
Dec 31, 2008 |
700,000 |
1.25 |
Compute the inventory value at December 31 of each year using the dollar value method, assuming incremental layers are valued at year end prices.