Respuesta :
Answer:
c. $394,080.
Explanation:
We have
January inventory = $300,000
December inventory = $ 430,080
Price index = 1.12
Let us use this method to evaluate the RF company's unending inventory.
Firstly is calculated as
December 31st divided by the price index.
= $430,080÷1.12
= $384,000
Subtracting the sales of the whole year from the inventory. We have
= $384,000 - $300,000
= =$84,000
Finally , calculating the RF Company's ending inventory as
= $300,000+$84,000×1.12
= $300,000+$94,080
=$394,080
$394,080 is the RF Company's ending inventory
Answer:
To properly calculate this question, the price index was not 112 but 1.12. Using the correct price index, the answer is C. $394,080
Explanation:
To calculate the ending inventory of RF Company, we have to first calculate the inventory at year-end (December 31st) divided by the price index.
[tex]=\frac{430,080}{1.12} = 384,000[/tex]
Second, we subtract the sales of the year from the inventory at year-end.
[tex]384000 - 300000 = 84000[/tex]
To calculate RF Company's ending inventory, we have;
[tex]300000 + 84000 * 1.12 = 394080[/tex]
Therefore, RF Company's ending inventory is $394,080
