Missy Limited sells household cleaners and had the following items of inventories at reporting date. $\begin{array}{rrr}
\text { Ittem }&\text { Quantity } & \text { Cost/unit } & \text { NRV/unit } \
\text { Window }&50 & \$ 25 & \$ 20 \\text { cleaners }\
\text { Vacuum }&20 & \$ 150 & \$ 160\\text { cleaners }
\end{array}$ What is the adjustment necessary at reporting date?

Question

Quizplus · Accepted Answer

The adjustment is necessary for the window cleaners, where the cost exceeds the NRV. The adjustment is $50 \times (\$25 - \$20) = \$250$. Therefore, CR Inventories by $250.

Missy Limited Sells Household Cleaners and Had the Following Items