Piggly Wiggly Sales had six CD players in inventory on December 31. The players were purchased in November for $170. Price lists from Piggly Wiggly Sales' supplier indicate that the same CD player would now cost the company $168. The current sales price for each of the CD players is $320. Using the lower-of-cost-and-net-realizable-value rule, the ending inventory of CD players should be shown at:

Question

Quizplus · Accepted Answer

The lower-of-cost-and-net-realizable-value rule states that the ending inventory of CD players should be shown at the lower of its cost or its net realizable value. The cost of the CD players is $170 each, and the net realizable value is $320 - $168 = $152 each. Therefore, the ending inventory of CD players should be shown at $152 each, or $1,020 in total.

Piggly Wiggly Sales Had Six CD Players in Inventory on December