Question

Oriole Company sells three different categories of tools (small, medium and large). The cost and market value of its inventory of tools are as follows. Cost MarketSmall $ 68,650 $ 56,490 Medium 283,710 237,140 Large 146,510 177,300 Determine the value of the company’s inventory under the lower-of-cost-or-market approach.

Answer 1

Answer:

$440,140

Explanation:

According to the accounting principle, the inventory should be valued at lower of cost or market value. The calculation is shown below:

                      Cost                   Market             Lower value

Small             $68,650           $56,490              $56,490

Medium        $283,710          $237,140              $237,140

Large            $146,510          $177,300               $146,510

Total                                                                    $440,140

Hence, the ending inventory would be valued at $440,140