Morris Corp. uses dollar-value LIFO. Certain information follows: Compute the ending 2016 inventory.
A) $11,900
B) $11,985
C) $12,006
D) $12,090

Question

Morris Corp. uses dollar-value LIFO. Certain information follows:  Compute the ending 2016 inventory.
A) $11,900 
B) $11,985 
C) $12,006 
D) $12,090

Quizplus · Accepted Answer

In dollar-value LIFO, the cost of the inventory is revalued using current prices at the end of each year. Using the given information, we can calculate the price index for 2016 as (8,200/7,800) = 1.051. To determine the ending inventory, we multiply the cost of the base-year inventory by the price index. Therefore, the ending inventory is (6,800 x 1.051) + (1,200) = $12,006. Option C is the closest choice.