Year
1 |
|
|
|
|
Index |
Beginning inventory |
|
|
$200.0 |
100 |
Purchases |
|
|
|
$2,200.0 |
|
total goods available for sale |
|
|
$2,400.0 |
|
ending inventory at current cost (per count) |
$330.0 |
110 |
ending inventory at base cost: 330/110*100 |
$351.0 |
|
less beginning inventory at base cost |
|
-$200.0 |
|
increase at base cost |
|
|
$100.0 |
|
increase at current cost: 100*110/100 |
$110.0 |
|
|
|
|
|
|
|
$ value LIFO ending inventory: |
increase |
|
$110.0 |
|
|
|
beginning inventory |
$200.0 |
|
|
|
|
|
$310.0 |
|
cost
of goods sold: |
|
$2,090.0 |
|
|
|
Example continued: |
|
|
|
|
|
Year
2 |
2 layers: index 100, index 110 |
|
|
Beginning inventory (dollar value LIFO) |
|
$310.0 |
|
Purchases |
|
|
|
$3,000.0 |
|
total goods available for sale |
|
|
$3,310.0 |
|
ending inventory at current cost (per count) |
$400.0 |
115 |
ending inventory at base cost: 400/115*100 |
$347.8 |
|
less beginning inventory at base cost |
|
-$351.0 |
|
increase at base cost |
|
|
$47.8 |
|
increase at current cost: 100*110/100 |
48*115/100 |
$55.0 |
|
|
|
|
|
|
|
$ value LIFO ending inventory: |
increase |
|
$55.0 |
|
|
|
beginning inventory |
$310.0 |
|
|
|
|
|
$365.0 |
|
cost
of goods sold: |
|
$2,945.0 |
|
|
|
Example
continued: |
|
|
|
|
|
Year
3 |
3 layers: index 100, index 110 and 115 |
|
Beginning inventory (dollar value LIFO) |
|
$365.0 |
|
Purchases |
|
|
|
$3,351.0 |
|
total goods available for sale |
|
|
$3,665.0 |
|
ending inventory at current cost (per count) |
$400.0 |
120 |
ending inventory at base cost: 400/115*100 |
400/120*100 |
$333.3 |
|
less beginning inventory at base cost |
|
-$347.8 |
|
decrease at base cost |
|
|
-$14.5 |
|
decrease at current cost: 67*115/100 |
14*115/100 |
-$16.7 |
|
$ value LIFO ending inventory: |
increase |
|
-$16.7 |
|
|
|
beginning inventory |
$365.0 |
|
$ value LIFO ending inventory: |
|
|
$348.3 |
|
cost
of goods sold: |
|
3316.667 |
|
|
|
|
|
|
|
|
|
Alternative calculation: |
|
|
|
|
ending inventory at base cost: 400/115*100 |
400/120*100 |
$333.3 |
|
|
|
|
|
|
|
layer
at index 115: |
|
$33.0 |
|
$38.3 |
|
layers at 100 and 110 |
|
|
$310.0 |
|
$ value LIFO ending inventory: |
|
|
$348.3 |
|
|
|
|
|
|
|
Note that because of the reduction, there will never be a layer at index 120: |
|
|
|
|
|
|
Year
4 |
3 layers: index 100, index 110 and 115 |
|
Beginning inventory (dollar value LIFO) |
|
$348.3 |
|
Purchases |
|
|
|
$3,800.0 |
|
total goods available for sale |
|
|
$4,148.3 |
|
ending inventory at current cost (per count) |
$600.0 |
125 |
ending inventory at base cost: 400/115*100 |
600/125*100 |
$480.0 |
|
less beginning inventory at base cost |
|
-$333.3 |
|
increase at base cost |
|
|
$146.7 |
|
increase at current cost: 146.7*125/100 |
14*115/100 |
$183.3 |
|
|
|
|
|
|
|
$ value LIFO ending inventory: |
increase |
|
$183.3 |
|
|
|
beginning inventory |
$348.3 |
|
$ value LIFO ending inventory: |
|
|
$531.7 |
|
cost
of goods sold: |
|
3616.667 |
|
|
|
|
|
|
|
|
|
The ending inventory in year 4 consists of the folowing layers: |
|
|
base |
|
current |
|
|
base
layer |
$200.0 |
|
$200.0 |
|
100 |
year
1 |
$100.0 |
|
$110.0 |
|
110 |
year
2 |
$33.0 |
|
$38.3 |
|
115 |
year
4 |
$146.7 |
|
$183.3 |
|
125 |
|
$479.7 |
|
$531.7 |
|
|