Lower of Cost or Market: Individual vs. Aggregate Refer to Practice 9-11. Apply… 1 answer below »

Lower of Cost or Market: Individual vs. Aggregate

Refer to Practice 9-11. Apply lower-of-cost-or-market accounting to the inventory as a whole. What total amount should be reported as inventory in the balance sheet?

Lower of Cost or Market

The following information pertains to the company’s ending inventory:

 

Original

Selling

Selling

Replacement

Normal

 

Cost

Price

Cost

Cost

Profit

Item A

$ 575

$ 700

$ 50

$ 600

$100

Item B

700

820

80

550

150

Item C

1,180

1,250

100

1,100

300

Apply lower-of-cost-or-market accounting to each inventory item individually. What total amount should be reported as inventory in the balance sheet?

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