Switzer, Inc. has 8 computers which have been part of the inventory for over two years. Each computer cost $600 and originally retailed for $900. At the statement date, each computer has a current replacement cost of $400. How much loss should Switzer, Inc., record for the year?
A)$1,600.
B)$2,400.
C)$3,200.
D)$4,000.

Question

Quizplus · Accepted Answer

The loss is calculated as the difference between the original cost and the current replacement cost, multiplied by the number of computers. In this case, the loss is ($600 - $400) * 8 = $1,600.