Final answer:
Best Buy should report an inventory amount of $3568 on their financial statements, using the lower-of-cost-or-net realizable value rule.
Step-by-step explanation:
Best Buy uses the lower-of-cost-or-net realizable value basis for its inventory. According to the data provided, the cost per unit for Cameras ranges from $8 to $12, and the net realizable value per unit ranges from $116 to $163. Since the lower-of-cost-or-net realizable value rule is applied, Best Buy must report the inventory at the lower value of either the cost or the net realizable value. Therefore, the amount to be reported on Best Buy's financial statements would be the sum of the cost of each unit multiplied by the lower value of the cost per unit and the net realizable value per unit for each respective item.
In this case, the lower values for each item are:
- Cameras - $8 (Cost per unit) and $116 (Net realizable value per unit)
- Minolta - $8
- Canon - $8
- Light meters - $109 (Cost per unit) and $116 (Net realizable value per unit)
- Vivitar - $109
- Kodak - $109
To calculate the total amount to be reported, the number of units of each item is multiplied by the respective lower value:
- Total for Cameras: (8 units * $8) = $64
- Total for Minolta: (1 unit * $8) = $8
- Total for Canon: (61°F Mostly cloudy 1 unit * $8) = $8
- Total for Light meters: (10 units * $109) = $1090
- Total for Vivitar: (12 units * $109) = $1308
- Total for Kodak: (10 units * $109) = $1090
Adding up all these totals, Best Buy should report an inventory amount of $3568 on their financial statements.