Determining the Lower of Inventory Cost or Market Value
The December 31, 2016 inventory of ABC Company consisted of four products, for which certain information is provided below.
Replacement Estimated Expected Normal Profit
Product Original Cost Cost Disposal Cost Selling Price on Sales
A $24.00 $22.00 $6.50 $40.00 20%
B $42.00 $40.00 $10.00 $48.00 25%
C $120.00 $115.00 $25.00 $190.00 30%
D $19.00 $15.80 $4.00 $26.00 10%
Using the lower-of-cost-or-market approach applied on an individual-item basis, compute the inventory valuation that should be reported for each product on December 31, 2016.
© SolutionLibrary Inc. solutionlibary.com 9836dcf9d7 https://solutionlibrary.com/business/accounting/determining-the-lower-of-inventory-cost-or-market-value-jdv9