Harlequin Co

Multiple Choice

Harlequin Co. has used the dollar-value LIFO retail method since it began operations in early 2008 (its base year) . Its beginning inventory for 2009 was $36,000 at cost and $72,000 at retail prices. At the end of 2009, it computed its estimated ending inventory at retail to be $120,000. Assuming its cost-to-retail percentage for 2009 transactions was 60%, what is the inventory balance that Harlequin Co. would report in its 12/31/09 balance sheet?

A) $64,800
B) $72,000
C) $120,000
D) It can't be determined with the given informations You would need to know the retail price index for 2009 transactions relative to the base year to make this computation.