Fifo inventory method for internal accounting

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Reference no: EM13873016

On January 1, 2010, Lucas Distributors, Inc., adopted the dollar value LIFO inventory method for income tax and external financial reporting. However, Lucas continued to use the FIFO inventory method for internal accounting and management purposes. In applying the LIFO method, Lucas uses internal conversion cost 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 is comprised of products A and B, for the two years following the adoption of LIFO: 

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Required:
1. Prepare a schedule to compute the internal conversion cost indexes for 2010 and 2011. Round indexes to two decimal places.
2. Prepare a schedule to compute the inventory amounts at December 31, 2010 and 2011, using the dollar-value LIFO inventorymethod. 

Reference no: EM13873016

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