On January 1, 2009, Badger Inc. adopted the dollar-value LIFO method. The inventory cost on this date was $100,000. The 2009 ending inventory, valued at year-end costs, was $126,000. The relative cost index for this inventory in 2009 was 1.05.
suppose that Badger's 2010 ending inventory, valued at year-end costs, was $143,000 and that the relative cost index for this inventory in 2010 was 1.10. In determining the inventory balance should Badger report in its 12/31/10 balance sheet:
A. An additional layer of $23,000 is added to the 1/1/10 balance.
B. An additional layer of $22,000 is added to the 1/1/10 balance.
C. An additional layer of $11,000 is added to the 1/1/10 balance.
D. None of these is correct.