Opera Corp. uses dollar-value LIFO method of computing its inventory cost. Data for the past three years is as follows:

Year ended Inventory at Price December 31. End-of-year Prices Index

2013 $390,000 1.00

2014 $756,000 1.05

2015 $810,000 1.10

What is the 2014 inventory balance using dollar-value LIFO?

(A) $390,000.

(B) $371,424.

(C) $736,362.

(D) $810,000.

Question

Business

Marcel Blackwell

27 August, 08:58

Opera Corp. uses dollar-value LIFO method of computing its inventory cost. Data for the past three years is as follows:

Year ended Inventory at Price December 31. End-of-year Prices Index

2013 $390,000 1.00

2014 $756,000 1.05

2015 $810,000 1.10

What is the 2014 inventory balance using dollar-value LIFO?

(A) $390,000.

(B) $371,424.

(C) $736,362.

(D) $810,000.

+1

Answers (1)

Know the Answer?

Ralph · Answer 1

(A) $390,000

Explanation:

Under LIFO method as the name suggests "Last In First Out"

the goods purchased in Last that is latest are sold first, that is goods purchased in 2015 will be sold first, therefore in the given case at the end of 2014 using LIFO we have,

Balance = $390,000

Because balance of goods purchased in 2014 i. e. $756,000 is sold first in 2014 remaining inventory at year end will be of 2013

Correct option is

(A) $390,000