One hundred units of inventory on hand at the end of the year are recorded at their cost of $10 each using LIFO. Current net realisable value is $8.00. What amount would be reported as Inventory on the balance sheet?

Question

Quizplus · Accepted Answer

Under LIFO, inventory is recorded at the lower of cost or net realizable value. Since the net realizable value ($8.00) is lower than the cost ($10.00), the inventory should be reported at $8.00 per unit. Therefore, 100 units x $8.00 = $800.00.

One Hundred Units of Inventory on Hand at the End