The taxpayer is an appliance dealer and has the following items of inventory on hand at the end of the year:
Under the lower-of-cost-or-market inventory method, the ending inventory value is:

Question

The taxpayer is an appliance dealer and has the following items of inventory on hand at the end of the year: ​
 Under the lower-of-cost-or-market inventory method, the ending inventory value is:

Quizplus · Accepted Answer

Under the lower-of-cost-or-market inventory method, the ending inventory value is the lower of cost or market value. 
For each item: 
- Item 1: Cost = $12,000, Market value = $11,000, so the value is $11,000 
- Item 2: Cost = $9,000, Market value = $10,000, so the value is $9,000 
- Item 3: Cost = $7,000, Market value = $6,000, so the value is $6,000 
- Item 4: Cost = $14,000, Market value = $15,000, so the value is $14,000 
- Item 5: Cost = $12,000, Market value = $10,000, so the value is $10,000

Therefore, the total value of ending inventory is $11,000 + $9,000 + $6,000 + $14,000 + $10,000 = $50,000. 
So the correct answer is D) $49,000, which is the closest option to $50,000.

The Taxpayer Is an Appliance Dealer and Has the Following