Question

On January 1, 2021, Badger Inc. adopted the dollar-value LIFO method. The inventory cost on this date was $100,000. The ending inventory, valued at year-end costs, and the relative cost index for each of the next three years is below:
Year-end Ending inventory at year-end costs Cost Index
2021 $126,000 1.05
2022 143,000 1.10
2023 153,600 1.20
In determining the inventory balance for Badger to report in its 12/31/2022 balance sheet:____.
A. $130,500.
B. $125,650.
C. $124,500.
D. $101,500.

Answer 1

Answer:

$133,000

Explanation:

The computation of the inventory balance is shown below;

For 2022

= $143,000 ÷ 1.10

= $130,000

This involved two layes, the first one is $100,000 and $30,000 for the second one

Now the second one would be brought forward i.e.

= $30,000 × 1.10

= $33,000

Now the inventory balance would be

= $100,000 + $33,000

= $133,000

Therefore this is the answer but the same is not provided in the given options