Better Buy has six CD players in inventory on 31 December. The players were purchased in November for $170. The current net realisable value for each of the CD players is $160. What would be the amount reported as Inventory on the balance sheet?

Question

Quizplus · Accepted Answer

The inventory should be reported at the lower of cost or net realizable value. The cost is $170 per player, but the net realizable value is $160 per player. Therefore, the inventory is valued at $160 x 6 = $960.

Better Buy Has Six CD Players in Inventory on 31