Question

Oriole Company developed the following information about its inventories in applying the lower-of-cost-or-net-realizable-value(LCNRV) basis in valuing inventories:

Product Cost Net realizable value
Market A $128000 $134000
B 90000 85000
C 179000 181000
After Oriole Company applies the LCNRV rule, the value of the inventory reported on the balance sheet would be:___.
a. $405000.
b. $392000.
c. $400000.
d. $397000.

Answer 1

b. $392000.

Step-by-step explanation:

The computation of the inventory balance reported on the balance sheet is shown below:

Product Cost Net realizable value Lower value

A $128000 $134000 $128,000

B $90,000 $85,000 $85,000

C $179,000 $181,000 $179,000

Total $392,000