Question

In: Accounting

Michael Bolton Company follows the practice of pricing its inventory at the lower-of-cost-or-market, on an individual-item...

Michael Bolton Company follows the practice of pricing its inventory at the lower-of-cost-or-market, on an individual-item basis

Item No. Quantity Cost per Unit Cost to Replace Estimated Selling Price Cost of Completion and Disposal Normal Profit
1320 1700 5.98 5.61 8.42 0.65 2.34
1333 1400 5.05 4.30 6.55 0.94 0.94
1426 1300 8.42 6.92 9.35 0.75 1.87

From the information above, determine the amount of Bolton Company inventory.

Solutions

Expert Solution

Inventory item Cost or market NRV - profit margin Replacement cost Net realizable value Market Cost Lower of cost or market Number of units Carrying value Total cost
1320 Market 5.43 5.61 7.77                    5.61                    5.98                    5.61                  1,700              9,537        10,166
1333 Market 4.67 4.3 5.61                    4.67                    5.05                    4.67                  1,400              6,538          7,070
1426 Market 6.73 6.92 8.6                    6.92                    8.42                    6.92                  1,300              8,996        10,946
Total Inventory            25,071        28,182

Amount of inventory is 25071


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