Question

Edgar Co. determines from a physical inventory count taken on the last day of fiscal 20X7 that its LIFO-basis inventory of widgets is $16,000, with a replacement cost of $14,000. Edgar estimates that, after further processing costs of $8,000, the widgets could be sold as finished Widgetrons for $28,000. Edgar’s normal profit margin is 15% of sales. According to the lower of cost or market rule, what amount should Edgar report as widget inventory in its balance sheet for fiscal 20X7?

Answer 1

Answer:

According to the lower of cost or market rule, what amount should Edgar report as widget inventory in its balance sheet for fiscal 20X7?

$15800

Explanation:

Sold price     28000

% profit margen 15%

profit margin         4200

Cost               23800

Procesing cost 8000

Inventory       15800