On January 1, 2021, Badger Inc. adopted the dollar-value LIFO method. The inventory cost on this date was $100,200. 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 costsCost Index2021$126,6301.05 2022 143,8801.10 2023 154,4401.20 In determining the inventory balance for Badger to report in its 12/31/2022 balance sheet (Multiple Choice):A. An additional layer of $23,220 is added to the 12/31/2021 balance.B. An additional layer of $22,220 is added to the 12/31/2021 balance.C. An additional layer of $11,220 is added to the 12/31/2021 balance.D. None of the above

Name: On January 1, 2021, Badger Inc. adopted the dollar-value LIFO method.
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Description: On January 1, 2021, Badger Inc. adopted the dollar-value LIFO method. The inventory cost on this date was $100,200. The ending inventory, valued at year-end costs, and the relative cost index for each of the next three years is below:

Dollar-value LIFO method: In this method, the valuation of inventory is calculated on the monetary…

Answered: On January 1, 2021, Badger Inc. adopted…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter7: Inventories: Cost Measurement And Flow Assumptions

Section: Chapter Questions

Problem 14RE: On January 1 of Year 1, Dorso Company adopted the dollar-value LIFO method of inventory costing....

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On January 1, 2021, Badger Inc. adopted the dollar-value LIFO method. The inventory cost on this date was $100,200. 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	$	126,630	1.05
2022		143,880	1.10
2023		154,440	1.20

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

A. An additional layer of $23,220 is added to the 12/31/2021 balance.

B. An additional layer of $22,220 is added to the 12/31/2021 balance.

C. An additional layer of $11,220 is added to the 12/31/2021 balance.

D. None of the above

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