Acute Company manufactures a single product. On December 31, 2019, Acute adopted the dollar-value LIFO inventory method. It computes its inventory on that date using the dollar value LIFO inventory method as $320,000. Inventory data for the succeeding years is as follows:

Year Ending Inventory Price Index

(End of Year Price) (Base Year 2019)

2020 380,000 1.10

2021 440,000 1.20

2022 450,000 1.25

Instructions:

a. Compute the ending inventory using dollar value to compute the balances for 2019 to 2022, including the LIFO reserve. You must show supporting computations.

b. Prepare the journal entry for 2020 record the LIFO Reserve.