At December 31, 2008, the following information was available from Goff Co.'s accounting records:
Sales for the year totaled $1,050,000. Markdowns amounted to $ 10,000. Under the lower-of-cost-or-market method, Goff's inventory at December 31, 2008 was
A) $294,000.
B) $245,000.
C) $252,000.
D) $238,000.

Question

At December 31, 2008, the following information was available from Goff Co.'s accounting records:
 Sales for the year totaled $1,050,000. Markdowns amounted to $ 10,000. Under the lower-of-cost-or-market method, Goff's inventory at December 31, 2008 was
A) $294,000. 
B) $245,000. 
C) $252,000. 
D) $238,000.

Quizplus · Accepted Answer

$980,000 ÷ $1,400,000 = 0.7
($1,400,000 - $10,000 - $1,050,000) × 0.7 = $238,000.

At December 31, 2008, the Following Information Was Available from Goff