Question:
Dalton Company adopted the dollar-value LIFO inventory method on January 1, 2013. In applying the
LIFO method, Dalton uses internal price indexes and the multiple-pools approach. The following data
were available for Inventory Pool No. 1 for the two years following the adoption of LIFO:
Under the dollar-value LIFO method the inventory at December 31, 2014, should be
a. $128,000
b. $129,800
c. $130,800
d. $140,800
Beginning in 2011, International Financial Reporting Standards are tested on the CPA exam along with
U.S. GAAP. The following question deals with the application of IFRS.
Answer:
b.
Inventory Layer Layer
at Base at Base Cost at Current Ending
Date Year Cost Year Cost Index Year Cost Inventory
1/1/13 $100,000 1.00 $100,000
12/31/13 120,000 $20,000 1.05 $21,000 121,000
12/31/14 128,000 8,000 1.10 8,800 129,800
Dalton Company adopted the dollar-value LIFO inventory method on January 1, 2013. In applying the
LIFO method, Dalton uses internal price indexes and the multiple-pools approach. The following data
were available for Inventory Pool No. 1 for the two years following the adoption of LIFO:
Under the dollar-value LIFO method the inventory at December 31, 2014, should be
a. $128,000
b. $129,800
c. $130,800
d. $140,800
Beginning in 2011, International Financial Reporting Standards are tested on the CPA exam along with
U.S. GAAP. The following question deals with the application of IFRS.
Answer:
b.
Inventory Layer Layer
at Base at Base Cost at Current Ending
Date Year Cost Year Cost Index Year Cost Inventory
1/1/13 $100,000 1.00 $100,000
12/31/13 120,000 $20,000 1.05 $21,000 121,000
12/31/14 128,000 8,000 1.10 8,800 129,800
