Use the Following Information for Questions
Dolan Corporation Adopted

question 75

Multiple Choice

Use the following information for questions
Dolan Corporation adopted the dollar-value LIFO method of inventory valuation on December 31, 2005.Its inventory at that date was $220,000 and the relevant price index was 100.Information regarding inventory for subsequent years is as follows: $\begin{array}{lrr}& \text { Inventory at } & \text { Current } \\\text { Date } & \text { Current Prices } & \text { Price Index }\\\text { December 31, 2006 } & \$ 256,800 & 107 \\\text { December 31, 2007 } & 290,000 & 125 \\\text { December 31,2008 } & 325,000 & 130\end{array}$
-What is the cost of the ending inventory at December 31, 2008 under dollar-value LIFO?

• A)$256,240.
• B)$254,800.
• C)$250,000.
• D)$263,400.

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Definitions:

Expense Accounts

Accounts used to record the consumption of goods and services, or costs incurred in operating a business.

Adjusting Entry

A journal entry made at the end of an accounting period to allocate income and expenditure to the appropriate period for a more accurate financial statement.

Income Statement

A financial statement that reports a company's financial performance over a specific accounting period, detailing revenues, expenses, and profits or losses.

Prepaid Rent

An asset account that represents rent payments made in advance of the rental period.