Answer
Inventory value at December 31, 2012= 989, 000
Work Step by Step
December 31, 2011 inventory at December 31, 2012 prices, 1,053,000 ÷ 1.08……….. 975,000
Less: Inventory, December 31, 2011……………………………………………….............................(800,000)
Increment added during 2012 at base prices……………………………………….................……..175,000
Increment added during 2012 at December 31, 2012 prices, 175,000 X 1.08………..….189,000
Add:Inventory at December 31, 2011………………………………….……….......................…………800,000
Inventory, December 31, 2012, under dollar-value LIFO method……………......…………..989,000
