Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. olson company adopted the dollar-value lifo method

Olson Company adopted the dollar-value LIFO method for inventory valuation at the beginning of 2015. The...

Free

50.1K

Verified Solution

Question

Accounting

Olson Company adopted the dollar-value LIFO method for inventoryvaluation at the beginning of 2015. The following information aboutthe inventory at the end of each year is available from Olson'srecords:

YearCurrent CostsIndex
2014$50,000100
201560,000108
201670,000115
201773,000125
201878,000135

Required:

1. Calculate the dollar-value LIFO inventory at the end of eachyear. Do not round your intermediate calculations. Round finalanswers to the nearest dollar.

2015201620172018
Ending Inventory at LIFO$$$

$

2. Prepare the appropriate disclosures for the 2018 annualreport if Olson uses current cost internally and LIFO for financialreporting. Round final answers to the nearest dollar.

20182017
Inventory at current cost$$
Less: LIFO reserve
Inventory at LIFO$$

Answer & Explanation Solved by verified expert
3.7 Ratings (619 Votes)

Solution 1:

Computation of inventory at base year prices and change from prior year - Olson Company
Year Inventory at end of year prices Price index Inventory at base year prices Change from Prior Years
2014 $50,000.00 100 $50,000 $0
2015 $60,000.00 108 $55,556 $5,556
2016 $70,000.00 115 $60,870 $5,314
2017 $73,000.00 125 $58,400 -$2,470
2018 $78,000.00 135 $57,778 -$622
Computation of dollar value inventory - LIFO
Particulars Amount
December 31, 2014:
$50,000*1 $50,000
December 31, 2015:
$50,000*1 $50,000
$5,556*1.08 $6,000
Inventory at Dec 31, 2015 $56,000
December 31, 2016:
$50,000*1 $50,000
$5,556*1.08 $6,000
$5,314*1.15 $6,111
Inventory at Dec 31, 2016 $62,112
December 31, 2017:
$50,000*1 $50,000
$5,556*1.08 $6,000
$2,844*1.15 $3,271
Inventory at Dec 31, 2017 $59,271
December 31, 2018:
$50,000*1 $50,000
$5,556*1.08 $6,000
$2,222*1.15 $2,555
Inventory at Dec 31, 2018 $58,556

Solution 2:

Particulars 2018 2017
Inventory at current cost $78,000.00 $73,000.00
Less: LIFO Reserve $19,444.00 $13,729.00
Inventory at LIFO $58,556.00 $59,271.00

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Transcribed Image Text

Olson Company adopted the dollar-value LIFO method for inventoryvaluation at the beginning of 2015. The following information aboutthe inventory at the end of each year is available from Olson'srecords:YearCurrent CostsIndex2014$50,000100201560,000108201670,000115201773,000125201878,000135Required:1. Calculate the dollar-value LIFO inventory at the end of eachyear. Do not round your intermediate calculations. Round finalanswers to the nearest dollar.2015201620172018Ending Inventory at LIFO$$$$2. Prepare the appropriate disclosures for the 2018 annualreport if Olson uses current cost internally and LIFO for financialreporting. Round final answers to the nearest dollar.20182017Inventory at current cost$$Less: LIFO reserveInventory at LIFO$$

Other questions asked by students

Q

What was the issue in the \"Blurred Lines\" Music case discussed in class? the subject is business law

Basic Math
Q

how one of the JFETs acts as the current source that forces Io to remain constant

Electrical Engineering
Q

97 At a distance from a uniformly charged long wire a charged particle is thrown...

Physics
Q

List all the combinations of three objects x y and z taken two at a...

Statistics
Q

s x sin x cos x v x sin x X t x w x...

Calculus
Q

! Required information The following information applies to the questions displayed below) At the beginning...

Accounting
Q

Select the types of taxpayers are more likely to be audited by the IRS. Complete...

Accounting
Q

Taylor, age 14, is claimed as a dependent by her parents. For 2022, she has...

Accounting
Q

Sanford Company The Sanford Company had the following balance sheet as of December 31, 20x2....

Accounting
Q

Stylon Co., a women's clothing store, purchased $48,000 of merchandise from a supplier on account,...

Accounting
Q

At the beginning of the current year, Wilson Corporation had 290,000 shares of $1 par...

Accounting
Q

A company is considering the following investment projects: Project (CO) CfI C12 Cf3 A 20,000...

Finance