Castle TV, Inc. purchased 1,000 monitors on January 5 at a per-unit cost of $185

Question

Castle TV, Inc. purchased 1,000 monitors on January 5 at a per-unit cost of $185, and another 1,000 units on January 31 at a per-unit cost of $230. In the period from February 1 through year-end, the company sold 1,800 units of this product. At year-end, 200 units remained in inventory. assume that the replacement cost of this monitor at year end is $220 per unit. Using the FIFO flow assumption, Castle TV should write down the carrying value on this inventory by a)$0, b) $ 1,000 c)$2,000 d) other amount

Explanation / Answer

b) $ 1,000

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