In applying the LCM rule, the inventory of skis would be valued at:
A)$162,000.
B)$128,000.
C)$120,000.
D)$126,000.$126,000 designated market value is less than $128,000 cost.

Question

Quizplus · Accepted Answer

When applying the LCM rule, we compare the cost and the designated market value of the inventory and take the lower of the two. In this case, the cost is $128,000 and the designated market value is $126,000, so we take the lower value. Therefore, the inventory of skis would be valued at $126,000.

In Applying the LCM Rule, the Inventory of Skis Would