[MadamJ]

Hi Guys I have a question. Does someone know the correct answer to #14 in the inventory module of the wiley text book, it is also in the becker questions as Q CPA-00080 (2nd Q in chapter 4 Inventories section). Becker has 1.33 as the answer and Wiley as 2. It’s the same question except Wiley changed the year 01 to 07. I would type out the question but it is pretty long.

Thanks

[Anonymous]

if it is a turnover question………maybe a math issue…………should be pretty easy just know how to calculate it and then be able to find beg inventory or what ever is missing

[MadamJ]

What is the price index used to compute the 01 dollar value lifo inventory layer?

Date Base yr cost Current cost

1/1/00 90,000 90,000

2000 layer 20.000 30,000

2001 layer 40,000 80,000

Becker says 1.33 and Wiley says 2 (40,000/80,000).

Which one would it be?

[Anonymous]

I get 1.33.

At Base year cost At current year cost At $ value LIFO

1/1 90,000 90,000 90,000

00 layer 20,000 30,000 21,818 1.09*20,000 120,000/110,000= 1.09

12/31/00 110,000 120,000 111,818

01 layer 40,000 80,000 53,200

12/31/01 150,000 200,000 165,018 200,000/120,000=1.33

150,000*1.33

[MadamJ]

That is what Becker has, i've noticed a lot of the same questions in the Wiley and Becker books that have different answers. Makes sense, thanks!

[Anonymous]

Ending inventory at end of yr prices

---

= Conversion Price Index

Ending Inventory at base year cost

that is what I see on pg 188 Wiley book Mod 8

[MadamJ]

That would result in a price index of 1.33. Ending inventory should be the total, not just the layer for the year. I think wiley has the wrong solution to the problem but the correct formula on page 188.

[Author]

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