P8-09

On January 1, 2020, Concord Wholesalers Inc. adopted the dollar-value LIFO inventory method for income tax and external financial reporting purposes. However, Concord continued to use the FIFO inventory method for internal accounting and management purposes. In applying the LIFO method, Concord uses internal conversion price indexes and the multiple pools approach under which substantially identical inventory items are grouped into LIFO inventory pools. The following data were available for inventory pool no. 1, which comprises products A and B, for the 2 years following the adoption of LIFO.

FIFO Basis per Records

Unit Total

Units Cost Cost

Inventory, 1/1/20

Product A 8,800 $30 $264,000

Product B 7,920 25 198,000

$462,000

Inventory, 12/31/20

Product A 14,520 36 $522,720

Product B 7,920 26 205,920

$728,640

Inventory, 12/31/21

Product A 11,440 40 $457,600

Product B 8,800 32 281,600

$739,200

A)Com pute the internal conversion price indexes for 2020 and 2021. (Round price index to 2 decimal places, e.g. 162.)

2020 2021

Conversion price index =

B)Com pute the inventory amounts at December 31, 2020 and 2021, using the dollar-value LIFO inventory method. (Round answers to 0 decimal places, e.g. 5,620.)

2020 2021

Inventory = $ $

Please show your work so that I am able to understand how you got the answer. This will help me to understand exactly how to calculate this problem on my own.