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8 February, 13:12

In January, Stitch, Inc. adopted the dollar-value LIFO method of inventory valuation. At adoption, inventory was valued at $50,000. During the year, inventory increased $30,000 using base-year prices, and prices increased 10%. The designated market value of Stitch's inventory exceeded its cost at year-end. What amount of inventory should Stitch report in its year-end balance sheet?

A. $80,000

B. $83,000

C. $85,000

D. $88,000

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  1. 8 February, 14:11
    0
    B. $83,000

    Explanation:

    Inventory value at adoption = $50,000

    Increase in inventory using base year price = $30,000

    Current year Price increase = 10%

    Increase price = $30,000 + ($30,000 x 10%)

    Increased price inventory = $30,000 + $3,000

    Increased price inventory = $33,000

    Amount of Inventory reported on balance = Inventory value at adoption + Increase price Inventory

    Amount of Inventory to be reported on balance = $50,000 + $33,000

    Amount of Inventory to be reported on balance = $83,000
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Home » Business » In January, Stitch, Inc. adopted the dollar-value LIFO method of inventory valuation. At adoption, inventory was valued at $50,000. During the year, inventory increased $30,000 using base-year prices, and prices increased 10%.
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