Question
On January 1, 2018, Ferret, Inc., adopted the dollar-value LIFO method. The inventory cost on this date was $100,000. The 2018 ending inventory, valued at
On January 1, 2018, Ferret, Inc., adopted the dollar-value LIFO method. The inventory cost on this date was $100,000. The 2018 ending inventory, valued at year-end costs, was $126,000. The relative cost index for this inventory in 2018 was 1.05. Suppose that Ferret's 2019 ending inventory, valued at year-end costs, was $143,000 and that the relative cost index for this inventory in 2019 was 1.10. Also suppose that Ferret's 2020 ending inventory, valued at year-end costs, was $153,600 and that the relative cost index for this inventory in 2020 was 1.20. What inventory balance would Ferret report on its 12/31/20 balance sheet?
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