On January 1, 2016, Badger Inc. adopted the dollar-value LIFO method. The invent

Question

On January 1, 2016, Badger Inc. adopted the dollar-value LIFO method. The inventory cost on this date was $117,000. The 2016 ending inventory, valued at year-end costs, was $146,080. The relative cost index for this inventory in 2016 was 1.10. Assume that Badger's 2017 ending inventory, valued at year-end costs, was $156,600 and that the relative cost index for this inventory in 2016 was 1.16. Suppose that Badger's 2018 ending inventory, valued at year-end costs, was $162,000 and that the relative cost index for this inventory in 2018 was 1.20. What inventory balance would Badger report on its 12/31/18 balance sheet?

$135,000

$136,932

$162,000

None of these answer choices is correct.

Explanation / Answer

Inventory balance would Badger report on its 12/31/18 balance sheet = 162000/1.2 = 135000

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