Suppose that Badger's 2015 ending inventory, valued at year-end costs, was $153,600 and that the relative cost index for this inventory in 2015 was 1.20. What inventory balance would Badger report on its 12/31/15 balance sheet?
A)$128,000.
B)$129,800.
C)$153,600.
D)None of the above is correct.

Question

Quizplus · Accepted Answer

To find the inventory balance that Badger would report on its 12/31/15 balance sheet, we need to use the formula:

Inventory balance = Ending inventory at year-end costs / Relative cost index

Plugging in the given values, we get:

Inventory balance = $153,600 / 1.20 = $128,000

Therefore, the correct answer is B.

Suppose That Badger's 2015 Ending Inventory, Valued at Year-End Costs