Harlequin Co. has used the dollar-value LIFO retail method since it began operations in early 2017 (its base year). Its beginning inventory for 2018 was $36,000 at cost and $72,000 at retail prices. At the end of 2018, it computed its estimated ending inventory at retail to be $120,000. Assuming its cost-to-retail percentage for 2018 transactions was 60%, what is the inventory balance that Harlequin Co. would report in its 12/31/2018 balance sheet?
A) $64,800.
B) $72,000.
C) $120,000.
D) The balance can't be determined with the given information.

Question

Quizplus · Accepted Answer

You would need to know the retail price index for 2018 transactions relative to the base year to make this computation.