On January 1, 2021, Avondale Lumber adopted the dollar-value LIFO inventory method. The inventory value for its one inv...

Question

On January 1, 2021, Avondale Lumber adopted the dollar-value LIFO inventory method. The inventory value for its one inventory pool on this date was $305.000. An internally generated cost index is used to convert ending inventory to base year. Year-end inventories at year-end costs and cost indexes for its one inventory pool were as follows:

Year Ended December 31	Inventory Year-Ended Costs	Cost Index (Relative to Base Year)
2021	$ 390,660	1.02
2022	402,800	1.06
2023	457,960	1.07
2024	491,700	1.10

Required:

Calculate inventory amounts at the end of each year. (Round Intermedlate calculations and final answers to the nearest whole dollars.)

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The valuation of inventory is crucial for any business since inventory constitutes a substantial portion of assets, therefore it is the duty of the financial managers to select the right method to find out the financial condition of the company that will assist the internal and external stakeholders in making a decision regarding the investment decision in the particular company .

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Linda Rodriguez · Accepted Answer

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