On January 1, 2020, Crow Company changed from FIFO to LIFO for income tax and external reporting purpos-es. On that same date, the beginning FIFO inventory (the base inventory for LIFO purposes) was $95,000. Thefollowing information is available from Crow's records for years 2020 through 2023.Year2020202120222023Ending Inventory on a FIFO Basis Ending Inventory at Base Year Costs$113,60084,60085,20092,900a.$125,000110,000115,000130,000RequiredCompute the price indices used to calculate ending inventory at base year costs. Round to two decimals.Hint: Divide ending inventory on a FIFO basis by ending inventory at base year for each year.b. Compute the ending inventory on a dollar-value LIFO basis for each year, 2020 through 2023.Prepare the journal entry at each year-end, 2020 through 2023, to adjust inventory to LIFO.

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Description: On January 1, 2020, Crow Company changed from FIFO to LIFO for income tax and external reporting purpos-es. On that same date, the beginning FIFO inventory (the base inventory for LIFO purposes) was $95,000. Thefollowing information is available fro

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Required a. Compute the price indices used to calculate ending inventory at base year costs. Round to two decimals. Hint: Divide ending inventory on a FIFO basis by ending inventory at base year for each year. b. Compute the ending inventory on a dollar-value LIFO basis for each year, 2020 through 2023. C. Prepare the journal entry at each year-end, 2020 through 2023, to adjust inventory to LIFO.

Required a. Compute the price indices used to calculate ending inventory at base year costs. Round to two decimals. Hint: Divide ending inventory on a FIFO basis by ending inventory at base year for each year. b. Compute the ending inventory on a dollar-value LIFO basis for each year, 2020 through 2023. C. Prepare the journal entry at each year-end, 2020 through 2023, to adjust inventory to LIFO.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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