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Problem 8-09 On January 1, 2020, Crane Wholesalers Inc. adopted the dollar-value LIFO inventory method for income tax and external financial reporting purposes. However, Crane

Problem 8-09

On January 1, 2020, Crane Wholesalers Inc. adopted the dollar-value LIFO inventory method for income tax and external financial reporting purposes. However, Crane continued to use the FIFO inventory method for internal accounting and management purposes. In applying the LIFO method, Crane 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

Units

Unit Cost

Total Cost

Inventory, 1/1/20
Product A 8,000 $30 $240,000
Product B 7,200 25 180,000
$420,000
Inventory, 12/31/20
Product A 13,200 36 $475,200
Product B 7,200 26 187,200
$662,400
Inventory, 12/31/21
Product A 10,400 40 $416,000
Product B 8,000 32 256,000
$672,000
Compute the internal conversion price indexes for 2020 and 2021. (Round price index to 2 decimal places, e.g. 162.)

2020

2021

Conversion price index

Compute 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 $

$

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