A company reports inventory using lower-of-cost-or-market. Below is information related to its year-end inventory: Calculate ending inventory under lower-of-cost-or-market and record any necessary adjustment to inventory.

Question

A company reports inventory using lower-of-cost-or-market. Below is information related to its year-end inventory:  Calculate ending inventory under lower-of-cost-or-market and record any necessary adjustment to inventory.

Quizplus · Accepted Answer

Ending inventory $ =(10 \times \$ 30)+(18 \times \$ 40)+(12 \times \$ 23)+(15 \times \$ 17)=\$ 1,551 $ 
Write-down $ =\$ 1,620 $ (total cost $ )-\$ 1,551(\mathrm{LCM})=\$ 69 $.

A Company Reports Inventory Using Lower-Of-Cost-Or-Market