Determine the value of the company”s inventory under the lower-of-cost-or-market approach.

(a) Tracy Company sells three different types of home heating stoves (gas, wood, and pellet). The cost and market value of its inventory of stoves are as follows.

Cost

Market

Gas

$ 84,000

$ 79,000

Wood

250,000

280,000

Pellet

112,000

101,000

Determine the value of the company"s inventory under the lower-of-cost-or-market approach.

Determine whether cost or market value is lower for each inventory type.

Sum the lowest value of each inventory type to determine the total value of inventory.