Suppose that Badger's 2018 ending inventory,valued at year-end costs,was $153,600 and that the relative cost index for this inventory in 2018 was 1.20.What inventory balance would Badger report on its 12/31/18 balance sheet?
A)$128,000.
B)$129,800.
C)$153,600.
D)None of these answer choices is correct.

Question

Quizplus · Accepted Answer

To find the historical cost of the inventory, we need to divide the ending inventory by the relative cost index:

$153,600 ÷ 1.20 = $128,000

Therefore, Badger would report an inventory balance of $128,000 on its 12/31/18 balance sheet.

Suppose That Badger's 2018 Ending Inventory,valued at Year-End Costs,was $153,600