Use the following information for questions 130 and 131.
Eaton Company, which uses the retail LIFO method to determine inventory cost, has provided the following information for 2014:
-Assuming that the price index was 105 at December 31, 2014 and 100 at January 1, 2014, what is the cost of Eaton's inventory at December 31, 2014 under the dollar-value-LIFO retail method?
A) $267,380.
B) $277,830.
C) $280,610.
D) $263,600.

Question

Use the following information for questions 130 and 131.
Eaton Company, which uses the retail LIFO method to determine inventory cost, has provided the following information for 2014: 
-Assuming that the price index was 105 at December 31, 2014 and 100 at January 1, 2014, what is the cost of Eaton's inventory at December 31, 2014 under the dollar-value-LIFO retail method?
A) $267,380. 
B) $277,830. 
C) $280,610. 
D) $263,600.

Quizplus · Accepted Answer

The dollar-value-LIFO retail method adjusts for inflation by using a price index. The inventory cost is calculated by dividing the ending inventory at retail by the price index (105/100 = 1.05) and then applying the cost-to-retail ratio.

Use the Following Information for Questions 130 and 131