, 24.01.2020katwright1124

# Acompany reports inventory using the lower of cost and net realizable value. below is information related to its year-end inventory: inventory quantity cost nrv item a 140 \$ 27 \$ 32 item b 60 32 22 a. calculate ending inventory under the lower of cost and net realizable value

Where are the choices? i can try to .
Ithink the most appropriate answer would be a.i hope it you!

Total Ending Inventory of \$5,100 should be reported in the accounts, based on the principle of Lower of Cost or Net Realizable Value

Explanation:

Based on Lower of Cost or Net Realizable Value (NRV) principle, Inventory of Item A should be reported on Cost (\$27) as it is lower than the NRV (\$32) and Inventory of Item B should be reported on NRV (\$22) as it is lower than its Cost (\$32).  Calculation of Ending Inventory is presented below in tabular form:

InventoryLower of    QuantityCost     Total Amount

Cost or NRV                                              (Quantity * Cost)

A                   Cost                  140          \$27       \$3,780

B                    NRV                  60          \$22       \$1,320

Total Ending Inventory                           \$5,100

The ending inventory under the lower of cost and net realizable value is 5100.

Explanation:

Ending inventory  = (140*27) + (60*22)

= 5100

Therefore, The ending inventory under the lower of cost and net realizable value is 5100.

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