Savage Company Adopted the Dollar-Value LIFO Method in 2014

question 119

Multiple Choice

Savage Company adopted the dollar-value LIFO method in 2014. At December 31, 2014, ending inventory was $102,000, with a price index of 1.00, using dollar-value LIFO. At December 31, 2015, the ending inventory using FIFO is $131,000 and the price index is 1.20. What is the LIFO Reserve on December 31, 2015? (Round all dollar amounts to the nearest dollar.)

• A) $7,167
• B) $20,400
• C) $21,833
• D) $29,000

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Definitions:

Endoplasmic Reticulum

A network of membranous tubules within the cytoplasm of a cell, involved in protein and lipid synthesis, and detoxification processes.

Mitochondrion

An organelle found in large numbers in most cells, where the biochemical processes of respiration and energy production occur.

DNA Replication

The process by which a cell duplicates its DNA, producing two identical copies prior to division.

Interphase

The longest phase of the cell cycle, where the cell prepares for division by replicating its DNA and proteins.