When the Double Extension Approach to the Dollar-Value LIFO Inventory

question 63

Short Answer

When the double extension approach to the dollar-value LIFO inventory cost flow method is used, the inventory layer added in the current year is multiplied by an index number.How would the following be used in the calculation of this index number? $\begin{array}{ll} &\text { Ending inventory}& \text { at current year cost}\\&\text { Ending inventory}& \text { at base year cost}\\a.&\text { Numerator } & \text { Denominator } \\b.&\text { Numerator } & \text { Not used } \\c.&\text { Denominator } & \text { Numerator } \\d.&\text { Not used } & \text { Denominator }\end{array}$

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Definitions:

HDC Rights

Rights of a Holder in Due Course, which protect the holder of a negotiable instrument from certain defenses and claims that could invalidate the instrument.

Indorses

Signs or writes one's name on the back of (a document) to make it transferable or to add details, also referred to as endorsing.

Note Payable

A written promise to pay a specified amount of money, usually with interest, at a future time.

Good Faith

A principle that implies honesty and sincerity of intention in the fulfillment of one's duties or negotiation.