Never Company developed the following information about its inventories in applying the lower-of-cost-or-net realizable value (LCNRV) basis in valuing inventories: If Never applies the LCNRV basis, the value of the inventory reported on the statement of financial position would be

Question

Never Company developed the following information about its inventories in applying the lower-of-cost-or-net realizable value (LCNRV) basis in valuing inventories:  If Never applies the LCNRV basis, the value of the inventory reported on the statement of financial position would be

Quizplus · Accepted Answer

To apply LCNRV basis, Never should compare the cost and net realizable value (NRV) of each inventory item and choose the lower amount to value its inventory. From the provided information, we can see that the cost of inventory is $525,000 and the NRV is $525,000. Since the NRV is equal to the cost, the value of inventory reported on the statement of financial position would be $525,000. Therefore, the best choice is C.

Never Company Developed the Following Information About Its Inventories in Applying