Ruby's has the following information regarding inventory balances for 1997,1998 and 1999. Ruby is considering changing from a FIFO system to the Dollar Value LIFO system as of January 1, 1998.

Ending balance, at cost, from books Price Index

Balance, 12/31/97 beginning balance $9,000 1.00

Balance, 12/31/98 $10,000 1.10

Balance, 12/31/99 $13,500 1.12

Purchases: 1998 $ 20,000

Purchases: 1999 $ 21,000

What should Ruby's Balance sheet look like for 1999 related to inventory? Assume book cost is lower than market value.

Which method of inventory (FIFO or DV LIFO) would Ruby's managers prefer in 1999 if their bonuses were based on earnings per share? Explain very briefly.