Question

Pina Colada Corp. developed the following information about its inventories in applying the lower-of-cost-or-net-realizable-value(LCNRV) basis in valuing inventories: Product Cost Market A $125000 $132000 B 88000 84000 C 176000 178000 After Pina Colada Corp. applies the LCNRV rule, the value of the inventory reported on the balance sheet would be

Answer 1

$385,000

Step-by-step explanation:

The computation of value of the inventory reported using the LCNRV rule is shown below:

Product Cost Market Lower value of cost and market

A $125,000 $132,000 $125,000

B $88,000 $84,000 $84,000

C $176,000 $178,000 $176,000

Ending inventory value $385,000

Based on this, the value of the ending inventory is $385,000 by applying the LCNRV rule