Question

Waterway Frame Camera Shop uses the lower-of-cost-or-net realizable value basis for its inventory. The following data are available at December 31.
Item Units Unit Cost Market Value
Cameras:
Minolta 9 $170 $154
Canon 6 151 153
Light meters:
Vivitar 12 122 110
Kodak 20 120 135
Determine the amount of the ending inventory by applying the lower-of-cost-or-net realizable value basis.

Answer 1

Answer:

$6,012

Explanation:

The computation of the amount of ending inventory is shown below:

Cameras          Unit               Cost         market value         LCM     Total value

Minolta             9                    $170        $154                       $154     $1,386

Canon              6                    $151         $153                       $151     $906

Light meters

Vivitar              12                   $122        $110                       $110       $1,320

Kodak              20                   $120       $135                     $120        $2,400

Total                                                                                                     $6,012

The quantity should be multiplied by cost or market value whichever is lower