Switzer, Inc.has 8 computers which have been part of the inventory for over two years.Each computer cost $600 and originally retailed for $900.At the statement date, each computer has a net realizable value of $400.How much loss should Switzer, Inc., record for the year?

Question

Quizplus · Accepted Answer

The loss is calculated based on the difference between the cost and the net realizable value. Each computer cost $600 and now has a net realizable value of $400, resulting in a loss of $200 per computer. With 8 computers, the total loss is 8 x $200 = $1,600.