1-

On January 1, 2021, Badger Inc. adopted the dollar-value LIFO method. The inventory cost on this date was $100,000. The ending inventory, valued at year-end costs, and the relative cost index for each of the next three years is below:

Year-end	Ending inventory at year-end costs				Cost Index
2021	$	126,000				1.05
2022		143,000				1.10
2023		153,600				1.20

In determining the inventory balance for Badger to report in its 12/31/2022 balance sheet:

Multiple Choice

An additional layer of $23,000 is added to the 12/31/2021 balance.

An additional layer of $22,000 is added to the 12/31/2021 balance.

An additional layer of $11,000 is added to the 12/31/2021 balance.

None of these answer choices are correct.

2-

Northwest Fur Co. started 2021 with $94,000 of merchandise inventory on hand. During 2021, $400,000 in merchandise was purchased on account with credit terms of 1/15, n/45. All discounts were taken. Purchases were all made f.o.b. shipping point. Northwest paid freight charges of $7,500. Merchandise with an invoice amount of $5,000 was returned for credit. Cost of goods sold for the year was $380,000. Northwest uses a perpetual inventory system. What is ending inventory assuming Northwest uses the gross method to record purchases?

Multiple Choice

$112,490.

$112,550.

$116,500.

3-

Data related to the inventories of Kimzey Medical Supply are presented below:

	Surgical				Surgical				Rehab				Rehab
	Equipment				Supplies				Equipment				Supplies
Selling price	$	260			$	120			$	340			$	165
Cost		170				90				250				162
Replacement cost		240				80				235				158
Costs to sell		30				5				25				10
Normal gross profit ratio		30	%			30	%			30	%			20	%

In applying the lower of cost or market rule, the inventory of rehab supplies would be valued at:

Multiple Choice

$122.

$158.

$162.

$155.