Question

Data related to the inventories of Alpine Ski Equipment and Supplies is presented below: Skis Boots Apparel Supplies Selling price $ 180,000 $ 140,000 $ 120,000 $ 60,000 Cost 128,000 133,000 90,000 45,000 Replacement cost 120,000 130,000 110,000 41,000 Sales commission 10 % 10 % 10 % 10 % In applying the lower of cost or net realizable value rule, the inventory of skis would be valued at: Multiple Choice $180,000. $128,000. $120,000. $162,000.

Answer 1

Answer: The answer is $128,000

Explanation:

$ $ $ $

Selling price. 180,000. 140,000. 120,000. 60,000

Less 10% commission 18,000. 14,000. 12,000. 6,000

-------------- -------------- --------------- -------------

162,000. 126,000 108,000. 54,000

Less cost. 128,000. 133,000. 90,000. 45,000

--------------- ---------------- --------------- ----------------

34,000 (7,000) 18,000. 9,000

Add: replacement cost 120,000. 130,000 110,000. 41,000

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Inventory 154,000. 137,000. 128,000. 50,000

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