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In year 1, Keisler Company had a beginning inventory (BI) of $150,000(beginning of the year...

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Accounting

In year 1, Keisler Company had a beginning inventory (BI) of $150,000(beginning of the year price) and an ending inventory (EI) of $202,500 based on the year-end price. The price index has increased from 100 at the beginning of the year to 120 at year-end.
(1) Calculate the ending inventory for year 1 under the DVLC method (hint: (1) deflate BI and EI "current cost amounts" back to base year value of dollar; (2) compare; (3) reinflate the surviving layer(s) to determine the DVLC Ending Inventory)
(2)(BONUS 8 points) At the end of year two, Keisler's inventory was $219,375 based on the year-end price. The price index was 135 at the end of year two. Calculate the inventory at the end of year two continuing the use of the DVLC method (hint: see part (1)).
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