The Information Below Is Provided for the Only Two Inventory

question 56

Essay

The information below is provided for the only two inventory items held by Hammond, Inc.:
The company uses double-extension dollar-value LIFO with only one pool.
Required:
a. Calculate the cost index for 2015. Round to the nearest hundredth for decimals.
b. Calculate the December 31, 2015 ending inventory for Hammond using dollar-value LIFO. Round to the nearest dollar.

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Definitions:

Minimum Cash Balance

The lowest amount of cash a business determines it needs on hand to meet its operational requirements.

Preliminary Cash Balance

An initial estimate of a company's cash balance at the beginning of a financial period, before any adjustments are made.

Cash Receipts

The total amount of cash collected by a business during a given period, including all sources of income.

Budgeted Income Statement

A financial statement that forecasts the revenue, expenses, and net income for a future period, based on management's expectations.