Selected information from Jenna Company 2007 annual report (December 31 year-end

Question

Selected information from Jenna Company 2007 annual report (December 31 year-end) is shown below: 20072006 $100,000S 80,000 760,000 580,000 Inventories Cost of Goods Sold nventories (footnote): Inventories are valued by the last in, first out (LIFO) method. Jenna has used LIFO since 1960. The excess of current cost over the amount stated for inventories valued by the LIFO method amounted to approximately $20,000 at December 31, 2007 and $16,000 at December 31, 2006 respectively. The approximate current value of the inventory as of December 31, 2007 is A $100,000. B. $120,000. C$104,000. D.$136,000

Explanation / Answer

Calculation of current value of inventory as of December 31, 2007:

Current value of inventory= Inventories+ excess of current cost over amount stated by LIFO as at 31 December 2007+ excess of current cost over amount stated by LIFO at December 31,2006

                                    = 100000+20000+16000= $136000

So correct answer is D) $136000

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