CALCULATOR PRINTER VERSION BACK NE Multiple Choice Question 127 Crane Company ad

Question

CALCULATOR PRINTER VERSION BACK NE Multiple Choice Question 127 Crane Company adopted the dollar-value LIFO method of inventory valuation on December 31, 2016. Its inventory a that date was $1000000 and the relevant price index was 100. Information regarding inventory for subsequent years is as follows: Inventory at Current Price Index Date December 31, 2017 Decembdr 31, 2018 December 31, 2019 Current Prices $1177000 1400000 1521000 107 125 130 What is the cost of the ending inventory at December 31, 2019 under dollar-value LIFO? O $1237000. $1194000. O $1193400. O $1170000

Explanation / Answer

Solution: Inventory on December 2019 at proce index 130 is $ 1521000 So the no of inventory = (1521000/130) = 11,700 units The price index of the inventory under LIFO method is 100 So the value of the inventory on 31st December 2019 as per LIFO is = $(11,700*100) = $ 11,70,000 So the correct answer is (d) i.e. $ 11,70,000

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