Question

Tamarisk, Inc. uses the lower-of-cost-or-net realizable value basis for its inventory. The following data are available at December 31.

Item		Units			Unit Cost			Net Realizable Value
Cameras:
Minolta		3			$180			$156
Canon		9			149			175
Light meters:
Vivitar		14			136			114
Kodak		20			117			130

Determine the amount of the ending inventory by applying the lower-of-cost-or-net realizable value basis.

The ending inventory

Answer 1

Solution:

The amount of the ending inventory by applying the lower-of-cost-or-net realizable value basis =$ 5,745

Working:

Item	Lower of Cost or NRV Per unit[a]	Units[b]	Total[a*b]
Minolta	$                         156.00	3	$     468.00
Canon	$                         149.00	9	$ 1,341.00
Vivitar	$                         114.00	14	$ 1,596.00
Kodak	$                         117.00	20	$ 2,340.00
Total			$ 5,745.00