Question 1 - Ashbrook Company adopted the dollar-value LIFO method on January 1, 2010 (using internal price indexes and multiple pools). The following data are available for inventory pool A for the 2 years following adoption of LIFO.
|
Inventory
|
At Base-
Year Cost
|
At Current-
Year Cost
|
|
1/1/10
|
$200,000
|
$200,000
|
|
12/31/10
|
240,000
|
264,000
|
|
12/31/11
|
256,000
|
286,720
|
Computing an internal price index and using the dollar-value LIFO method, at what amount should the inventory be reported at December 31, 2011?
Question 2 - Donovan Inc., a retail store chain, had the following information in its general ledger for the year 2010.
|
Merchandise purchased for resale
|
$909,400
|
|
Interest on notes payable to vendors
|
8,700
|
|
Purchase returns
|
16,500
|
|
Freight-in
|
22,000
|
|
Freight-out
|
17,100
|
|
Cash discounts on purchases
|
6,800
|
What is Lindros' inventoriable cost for 2010?