Question

Jones Company's inventory cost is $100. The expected sales price is $110, estimated selling costs are $12. Consistent with the lower of cost and net realizable value approach, this inventory item should be valued at

Answer 1

inventory item should be valued at $98.00

Step-by-step explanation:

IAS 2 required inventory to be carried at the lower of cost and net realizable value.

Net Realisable Value is estimated selling price of inventory - Cost to sell

Net Realisable Value = ($110 - $12) = $98.00

Cost = $100.00

The lower is NRV

Therefore the cost is $98.00