Question

Cullumber Inc has the following information related to an item in its ending inventory. Acer Top has a cost of $31, a replacement cost of $30, a net realizable value of $33, and a normal profit margin of $4. What is the final lower-of-cost-or-market inventory value for Acer Top?

Answer 1

final lower-of-cost-or-market inventory value for Acer Top is $29

Step-by-step explanation:

given data

Acer Top cost = $31

replacement cost = $30

net realizable value = $33

normal profit margin = $4

to find out

final lower-of-cost-or-market inventory value for Acer Top

solution

we get here market value that is

market value = net realizable value - Normal profit margin .............1

market value = $33 -$4 = $29

and as we know Ending inventory is Lower of cost or market inventory

so here Lower of $31 or $29 is $29

final lower-of-cost-or-market inventory value for Acer Top is $29