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A company reports inventory using the lower of cost and net realizable value. Below is information related to its year-end inventory: Inventory Quantity Cost NRV Unit A 15 $ 37 $ 39 Unit B 23 45 42 Unit C 17 28 32 Unit D 20 14 13 a. Calculate ending inventory under the lower of cost and net realizable value.

Respuesta :

hyderali230

Answer:

$2,257

Explanation:

Generally Acceptable Accounting Principles requires that the closing inventory should be valued at

Lower of

  • cost
  • Net realizable value

Valuation Table

Inventory    Quantity   Cost         NRV    Inventory Value (Lower)

Unit A              15          $37          $39     $37 x 15 = $555

Unit B              23         $45          $42     $42 x 23 = $966

Unit C              17          $28          $32     $28 x 17 = $476

Unit D              20        $14           $13       $13 x 20 = $260

Total Value of Inventory                                             $2,257

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