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What is ending inventory using the dollar-value LIFO method

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Question - Use the following information for the two questions below. Fallon Company manufactures a product called Roots Shampoo. On December 31, 2017, Fallon adopted the dollar-value LIFO inventory method. The inventory of Roots Shampoo on that date using the dollar-value LIFO inventory method was $450,000. Inventory data are as follows:

Year Inventory at year-end $ Price Index

2018 $630,000 1.05

2019 680,000 1.15

2020 800,000 1.25

Q1. What is ending inventory, using the dollar-value LIFO method for 2020?

A. $658,370

B. $659,239

C. $681,739

D. $680,000

Q2. The journal entry to record the LIFO reserve in 2020 will include:

A. A debit to Cost of Goods Sold for $140,761

B. A credit to LIFO Reserve for $59,130

C. A credit to Cost of Goods Sold for $59,130

D. A debit to LIFO Reserve for $140,761

Reference no: EM132740728

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