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Nash Camera Shop Inc. uses the lower-of-cost-or-net realizable value basis for its inventory. The following data are available at December 31.

Units Cost per Unit Net Realizable Value per Unit
Cameras
Minolta 5 $167 $164
Canon 8 134 156
Light Meters
Vivitar 11 118 114
Kodak 9 125 145

What amount should be reported on Nash Camera Shop's financial statements, assuming the lower-of-cost-or-market rule is applied?

Respuesta :

Answer:

$4,271

Explanation:

IAS 2 requires that inventory be measured at the lower of cost or net realizable value. Since inventory is initially recognized at cost, where the cost is lower than the net realizable value (NRV), the cost is written down to the NRV.

              Unit    Cost per unit    NRV Per unit   adjusted cost  Inventory amount

Minolta     5           167                     164                 164                       820

Canon      8            134                     156               134                      1072

Vivitar      11            118                      114                 114                       1254

Kodak      9            125                     145                125                     1125

Total                                                                                                   4,271      

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