Reference no: EM132408389
Question
On January 1, 2020, Concord Wholesalers Inc. adopted the dollar-value LIFO inventory method for income tax and external financial reporting purposes. However, Concord continued to use the FIFO inventory method for internal accounting and management purposes. In applying the LIFO method, Concord uses internal conversion price indexes and the multiple pools approach under which substantially identical inventory items are grouped into LIFO inventory pools. The following data were available for inventory pool no. 1, which comprises products A and B, for the 2 years following the adoption of LIFO.
FIFO Basis per Records
Unit Total Units Cost Cost
Inventory, 1/1/20
Product A 8,800 $30 $264,000
Product B 7,920 25 198,000 $462,000
Inventory, 12/31/20
Product A 14,520 36 $522,720
Product B 7,920 26 205,920 $728,640
Inventory, 12/31/21
Product A 11,440 40 $457,600
Product B 8,800 32 281,600 $739,200
A) Compute the internal conversion price indexes for 2020 and 2021. (Round price index to 2 decimal places, e.g. 162.)
B) Compute the inventory amounts at December 31, 2020 and 2021, using the dollar-value LIFO inventory method. (Round answers to 0 decimal places, e.g. 5,620.)