A company's total cost of inventory was $305,000 and its net realizable value is $297,000. Under the lower of cost and net realizable value, the amount reported should be $305,000.

Question

Quizplus · Accepted Answer

Under the lower of cost and net realizable value rule, inventory is reported at the lower of its cost or net realizable value. In this case, the net realizable value is less than the cost, so the inventory should be reported at the lower amount of $297,000.

A Company's Total Cost of Inventory Was $305,000 and Its