Dollar Value Lifo Mason Corporation uses Dollar Value-Lifo to account for their inventory. As such, at the end of FY 2014, Mason Corporation notes inventory values at various base years amounts. In addition, Mason knows the price index (inflation rate) since its inception of using Dollar Value Lifo Compute the ending inventory (at Lifo Cost) amount for each of the fiscal years since 2010 C-AB Computation of Inventory Base Rx Ending Inventory at End of Years Prices Price Index Increase/Decrease in Inventory Value of Inventory Increase or Decrease Ending Inventory Value at LIFO Cost 52,300 100,09o 96,580 107,514 92,125 Date Base Year 12/31/2010 12/31/2011 12/31/2012 12/31/2013 12/31/2014 52,300 118,395 126,799 141,988 131,698 1.00 1.35 1.49 1.54 2.30O 87,700 85,100 92,20o 1,80O 35,400 (2,600) 7100 (10,400) 47,79o (3,510) 10,934 (15,389 Tickmark Legend A- The amounts in these columns represent the ending inventory amount based on current price of the inventory. As such, you have to factor the price the inventory was originally purchased for. Prices of commoditiess flucuate annually and can raise the FMV price of inventory. Thus, we have to back out inflation to get to the actual increase/decrease each year B- This represents the flucuation of inflation since the start of using Dollar Value LIFO C- This represents the inventory at the original inventory base value (2010) D-This represents the increase or decrease of inventory based on the value E- The increase/decrease in base value needs to be multiplied by the inflation rate for that period. If there is a decrease in inventory, than you have to take the decrease based on the previous layer until its exhausted. When one layer is exhausted, then you move back to the previous layer with an F-Ending Inventory recorded on the financial statements at LIFO Costing