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On January 1, 2016, Badger Inc. adopted the dollar-value LIFO method. The inventory cost on this date was $109,000. The 2016 ending inventory, valued at

On January 1, 2016, Badger Inc. adopted the dollar-value LIFO method. The inventory cost on this date was $109,000. The 2016 ending inventory, valued at year-end costs, was $132,880. The relative cost index for this inventory in 2016 was 1.10.

Suppose that Badger's 2017 ending inventory, valued at year-end costs, was $145,000 and that the relative cost index for this inventory in 2017 was 1.16. In determining the inventory balance should Badger report in its 12/31/17 balance sheet:

A. An additional layer of $24,200 is added to the 1/1/17 balance.

B. An additional layer of $23,528 is added to the 1/1/17 balance.

C. An additional layer of $4,872 is added to the 1/1/17 balance.

D. None of the above is correct.

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