Question

Sheffield Company developed the following information about its inventories in applying the lower-of-cost-or-net realizable value (LCM) basis in valuing inventories. Net realizable Product Cost value A $112000 $130000 B 83000 72000 C 157000 161000 If Sheffield applies the LCNRV basis, the value of the inventory reported on the balance sheet would be

Answer 1

$341,000

Step-by-step explanation:

The value of the inventory is computed as shown below (applying LCM basis)

= Value of product A + Value of product B + Value of product C

= $112,000 + $72,000 + $157,000

= $341,000

Thus, the value of the inventory reported on the balance sheet would be $341,000.