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On January 1, 2009, Badger Inc. adopted the dollar-value LIFO method. The inventory cost on this date was $100,000. The 2009 ending inventory, valued at year-end costs, was $126,000. The relative cost index for this inventory in 2009 was 1.05.

suppose that Badger's 2010 ending inventory, valued at year-end costs, was $143,000 and that the relative cost index for this inventory in 2010 was 1.10. In determining the inventory balance should Badger report in its 12/31/10 balance sheet:

A. An additional layer of $23,000 is added to the 1/1/10 balance.

B. An additional layer of $22,000 is added to the 1/1/10 balance.

C. An additional layer of $11,000 is added to the 1/1/10 balance.

D. None of these is correct.

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Accounting Basics, Accounting

Category:- Accounting Basics
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