1. Suppose the inventory from year 1 remained unchanged in year 2 (i.e the company did not purchase nor sell any inventory in year 2), what would be the market value of the inventory by the end of year 2?

2.What was the actual market value of the inventory at the end of year 2? (simple question, from the table)

3. Based on your answers to the previous two questions, how much inventory was added in year 2 (based on cost, show calculations)

4. Based on your answers to the previous question, what is the balance sheet value of the inventory at the end of year 2? Add year 1 inventory ($240,000) to the year 2 layer (at cost, answer 5 above) to get the ending inventory (at cost) for year 2. This is the amount that goes on the balance sheet. Show work.

5.Review the answer and explanation to question 8 copied below regarding the year 3 inventory on balance sheet. Do you now understand the answer? If not, you may ask a SPECIFIC question about the explanation in the solution.

6. What is this inventory calculation method called Dollar-Value?

Minsk Company adopted the dollar-value last-in, first-out (LIFO) method of inventory valuation at December 31, Year 1. Inventory balances and price indices are shown below. Ending Inventory at End-of-Year Price Index at December 31 Prices December 31 Year 1 $240,000 100 Year 2 275,000 110 Year 3 300,000 120