# Terry Company had January 1 inventory of \$100,000 when it adopted dollar-value LIFO.During the year, purchases were \$600,000 and sales were \$1,000,000. December 31 inventory atyear-end prices was \$143,360, and the price index was 112 (Price Index for base year = 100).What is Terry’s ending inventory and gross profit, respectively?a. \$131,360 and 428,000b. \$128,000 and 443,460c. \$131,360 and 431,360d. \$143,360 and 443,460

Individual Income Taxes
43rd Edition
ISBN:9780357109731
Author:Hoffman
Publisher:Hoffman
Chapter18: Accounting Periods And Methods
Section: Chapter Questions
Problem 67P
Question

Terry Company had January 1 inventory of \$100,000 when it adopted dollar-value LIFO.
During the year, purchases were \$600,000 and sales were \$1,000,000. December 31 inventory at
year-end prices was \$143,360, and the price index was 112 (Price Index for base year = 100).
What is Terry’s ending inventory and gross profit, respectively?
a. \$131,360 and 428,000
b. \$128,000 and 443,460
c. \$131,360 and 431,360
d. \$143,360 and 443,460

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 3 steps with 2 images