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Dollar Value Lifo: Inventory at the end of year is divided by year end price index to arrive at inventory at base year. Incremental layers are multiplied by incremental layer index to arrive at dollar value lifo inventory.
If the problem does not state an incremental or average price index then use the year end index for the incremental layers.
The inventory as of the adoption date of 12/31/2010 for Dollar Value LIFO is $ 205,000.
Additional data is as follows:
Inventory date Inventory at Year-end prices Year-End price index
12/31/2011 215,000 1.1012/31/2012 245,000 1.1412/31/2013 230,000 1.0812/31/2014 270,000 1.12
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