Final answer:
The correct formula for dollar value LIFO is not presented in the options; it involves adjusting the ending inventory to reflect current cost levels and comparing it to the beginning inventory at base year costs. A standard inventory accounting formula is 'Ending Inventory = Beginning Inventory + Purchases - Cost of Goods Sold', which is relevant to understand basic inventory valuation before applying dollar value LIFO adjustments.
Step-by-step explanation:
The correct formula for calculating ending inventory using the dollar value LIFO method is not listed in the options provided. The conventional approach to compute ending inventory under the dollar value LIFO (Last-In, First-Out) method involves revaluing the inventory at the end of the period to reflect the current cost levels and then comparing it with the beginning inventory at base year costs. Any increase in the dollar value of the inventory is considered to be due to current year costs and is converted into the LIFO layers using the LIFO inflation index. However, here is a more standard formula that is commonly used for inventory accounting, which might help clarify the basic components of inventory calculations
Ending Inventory = Beginning Inventory + Purchases - Cost of Goods SoThis formula reflects the basic accounting equation for inventory where the cost of goods available for sale (Beginning Inventory + Purchases) minus the Cost of Goods Sold equals the Ending Inventory. To apply this in the context of the dollar value LIFO system, adjustments would need to be made to account for changes in inventory costs due to inflation or deflation.