Suppose that the Consumer Price Index [CPI] on 1 January 2020was 100 and CPI on 31 December

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Question:

Suppose that the Consumer Price Index [CPI] on 1 January 2020was 100 and CPI on 31 December 2020 is 103. The historical cost of ending inventory is 20000. The adjusted value of ending inventory that reflects inflation is

a. 20000
b. 21000
c. 20600
d. 20400