Suppose that Badger's 2017 ending inventory,valued at year-end costs,was $143,000 and that the relative cost index for this inventory in 2017 was 1.10.In determining the inventory balance should Badger report in its 12/31/17 balance sheet:
A)An additional layer of $23,000 is added to the 1/1/17 balance.
B)An additional layer of $22,000 is added to the 1/1/17 balance.
C)An additional layer of $11,000 is added to the 1/1/17 balance.
D)None of the above is correct.

Question

Quizplus · Accepted Answer

The additional layer is calculated by dividing the ending inventory by the cost index: $143,000 / 1.10 = $130,000. The difference between the ending inventory and the adjusted inventory is $143,000 - $130,000 = $13,000. However, the question seems to have a typo, and the closest correct calculation would be $11,000.

Suppose That Badger's 2017 Ending Inventory,valued at Year-End Costs,was $143,000