Question

Moss Co. has determined its year-end inventory on a FIFO basis to be $400,000. Information pertaining to that inventory is as follows: Estimated selling price $ 408,000 Estimated costs to sell 20,000 What should be the book value of Moss’s inventory?

Answer 1

Answer:

book value of Moss’s inventory = $388000

Explanation:

given data

year end inventory = $400,000

selling price =  $408,000

costs to sell = 20,000

to find out

book value of Moss’s inventory

solution

we know that inventory value should be low the cost or net realisable cost

so here net realisable cost will be

net realisable cost  = selling price - costs to sell

net realisable cost  = $408,000 - $20,000

net realisable cost  = $388000

so  book value of Moss’s inventory will be $388000 due to lower value