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Knowledge Check 01 On January 1, Greenview Company adopted the dollar-value LIFO method. The inventory cost on January 1 was $112,000. On December 31, ending inventory had a cost of $136,400. The cost index for the year was 1.10. For what amount would ending inventory be reported

Respuesta :

Answer:

Inventory to be reported is  125200

Explanation:

Adjust inventory to base year prices  

$136400/1.1=  124000

CURRENT YEAR LIFO LAYER  

$124000-$112000=  12000

Add the new lifo layer at end of period prices  

to prior year lifo inventory  

112000*1= 112000  

12000*1.1= 13200  

inventory to be shown 125200