Answer :
Answer:
2021 $421,000
2022 $437,800
2023 $426,600
Explanation:
INVENTORY LAYERS AY BASE YEAR COST
Inventory Layers at year
end cost÷Year end cost index =Inventory Layers at base year cost
1/ 1, 2021, $400,000÷1=$400,000
12/31/2021 $ 441,000 ÷1.05=$420,000
12/31/2022 487,200 ÷1.12=$435,000
12/31/2023 510,000÷1.20=$425,000
INVENTORY LAYERS CONVERTED TO COST
Inventory Layers
at base year cost× Year cost index=Inventory layers Converted to Cost
Base $400,000 ×1=$400,000
Base $400,000×1=$400,000
2021 $20,000×1.05=$21,000
Base $400,000×1=$400,000
2021 $20,000 1.05=$21,000
2022 $15,000×1.12÷$16,800
Base$400,000×1=$400,000
2021 $20,000×1.05=$21,000
2022$5,000×1.12=$5,600
INVENTORY DVL COST
Base $400,000×1=$400,000
2021 $20,000×1.05=$21,000
Total $421,000
Base $400,000×1=$400,000
2021 $20,000 1.05=$21,000
2022 $15,000×1.12÷$16,800
Total $437,800
Base$400,000×1=$400,000
2021 $20,000×1.05=$21,000
2022$5,000×1.12=$5,600
Total $426,600