Use the following information for questions.
Gross Corporation adopted the dollar-value LIFO method of inventory valuation on December 31, 2009.Its inventory at that date was $220,000 and the relevant price index was 100.Information regarding inventory for subsequent years is as follows:
-What is the cost of the ending inventory at December 31, 2010 under dollar-value LIFO?

Question

Use the following information for questions.
Gross Corporation adopted the dollar-value LIFO method of inventory valuation on December 31, 2009.Its inventory at that date was $220,000 and the relevant price index was 100.Information regarding inventory for subsequent years is as follows: 
-What is the cost of the ending inventory at December 31, 2010 under dollar-value LIFO?

Quizplus · Accepted Answer

To calculate the cost of the ending inventory at December 31, 2010, we need to determine the inventory at base-year prices for both years (2009 and 2010), and then apply the LIFO method.

Inventory at base-year prices:
- 2009: $220,000 (given)
- 2010: $282,000 (110% x $220,000)

Next, we apply the LIFO method using the dollar-value approach. We assume that inventory purchased most recently is sold first, and we express ending inventory in terms of base-year prices.

- Cost of goods sold in 2010: $300,000 (given)
- Ending inventory at base-year prices: 
    = $282,000 - ($300,000/110%) 
    = $241,400

Therefore, the answer is C) $241,400.

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