The taxpayer is an appliance dealer and has the following items of inventory on hand at the end of the year:
Item
Cost
Replacement
Cost
Expected Selling Price
20 Big Screen TV's
$12,000
$14,000
$18,000
200 DVD Players
20,000
16,000
18,000
100 Stereo Systems
24,000
21,000
35,000
$56,000
$51,000
$71,000

Under the lower-of-cost-or-market inventory method,the ending inventory value is:
A)$71,000.
B)$56,000.
C)$51,000.
D)$49,000.
E)None of the above.

Question

The taxpayer is an appliance dealer and has the following items of inventory on hand at the end of the year:
Item
Cost
Replacement
Cost
Expected Selling Price
20 Big Screen TV's
$12,000
$14,000
$18,000
200 DVD Players
20,000
16,000
18,000
100 Stereo Systems
24,000
21,000
35,000
$56,000
$51,000
$71,000
​
Under the lower-of-cost-or-market inventory method,the ending inventory value is:
A)$71,000.
B)$56,000.
C)$51,000.
D)$49,000.
E)None of the above.

Quizplus · Accepted Answer

The Answer of The taxpayer is an appliance dealer and has the following items of inventory on hand at the end of the year:
Item
Cost
Replacement
Cost
Expected Selling Price
20 Big Screen TV's
$12,000
$14,000
$18,000
200 DVD Players
20,000
16,000
18,000
100 Stereo Systems
24,000
21,000
35,000
$56,000
$51,000
$71,000
​
Under the lower-of-cost-or-market inventory method,the ending inventory value is:
A)$71,000.
B)$56,000.
C)$51,000.
D)$49,000.
E)None of the above.

The Taxpayer Is an Appliance Dealer and Has the Following