Pharoah Corporation adopted the dollar-value LIFO method of inventory valuation on December 31, 2024. Its inventory at that date was $1110000 and the relevant price index was 100. Information regarding inventory for subsequent years is as follows: Date December 31, 2025 December 31, 2026 December 31, 2027 Inventory at Current Prices $1290000 1448000 1629000 Current Price Index 105 123 128 What is the cost of the ending inventory at December 31, 2027 under dollar-value LIFO? (Round intermediate calculations and final answer to decimal places eg 10.0001

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Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.