Question

Oriole Company sells three different categories of tools (small, medium and large). The cost and market value of its inventory of tools are as follows. Cost MarketSmall $ 68,650 $ 56,490 Medium 283,710 237,140 Large 146,510 177,300 Determine the value of the company’s inventory under the lower-of-cost-or-market approach.

Answer 1

$440,140

Step-by-step explanation:

According to the accounting principle, the inventory should be valued at lower of cost or market value. The calculation is shown below:

Cost Market Lower value

Small $68,650 $56,490 $56,490

Medium $283,710 $237,140 $237,140

Large $146,510 $177,300 $146,510

Total $440,140

Hence, the ending inventory would be valued at $440,140