Montana Co. has determined its year-end inventory on a FIFO basis to be $600,000. Information pertaining to that inventory is as follows: What should be the carrying value of Montana's inventory?
A)$600,000.
B)$520,000.
C)$590,000.
D)$510,000.

Question

Quizplus · Accepted Answer

The carrying value of inventory should be the lower of cost or market. The market value is $520,000, which is lower than the FIFO cost of $600,000. Therefore, the carrying value should be $520,000.