Problem #1
Houston Rockets Company adopted the dollar-value LIFO inventory method on January 1, 2013. In
applying the LIFO method, ABC uses internal indexes and the multiple-pools approach. The following
data were available for Inventory Pool No. 3 for the two years following the adoption 9f LIFO:
Ending Inventory
Year
At Current
Cost
Cost
Index
01/01/13 $ 300,000
12/31/13 $ 345,600
12/31/14 $ 405,000
1.00
1.06
1.10
Under the dollar-value LIFO method, the inventory at December 31, 2014, should be? You must show
your work to receive credit.
Problem #2
Golden State Warriors Products uses the conventional retail method to estimate its ending inventories.
The following data has been summarized for the year 2015:
Cost
Inventory, January 1
Purchases
Net markups
Net markdowns
Net sales
$
Retail
63,000 $ 88,000
332,360 476,000
10,000
16,700
392,000
Required:
Estimate the ending inventory as of December 31, 2015, using the conventional retail method. You
must show your work to receive credit.