Assume that an entity acquired 150 items of inventory at a cost of $90 each,and sold 100 of the items for $160 each when the replacement cost to the entity was $120 each.Also assume that the replacement cost of the 50 remaining items of inventory at year end was $130.What would be the realised holding gain on the inventory that was sold?

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Quizplus · Accepted Answer

The realized holding gain is calculated based on the difference between the replacement cost at the time of sale and the original cost. Here, it is 100 items x ($120 - $90) = $3,000.

Assume That an Entity Acquired 150 Items of Inventory at a Cost