On July 10, 2016. Johnson Corporation signed a purchase commitment to purchase i

Question

On July 10, 2016. Johnson Corporation signed a purchase commitment to purchase inventory for $210,000 on or before February 15, 2017. The company's fiscal year-end is December 31. The contract was exercised on February 1, 2017, and the inventory was purchased for cash at the contract price On the purchase date of February 1, the market price of the inventory was $220.000. The market price of the Inventory on December 31, 2016, was $185000. The company uses a perpetual inventory system At what amount will Johnson record the inventory purchased on February 1, 2017? $195,000 $185,000 $210,000 $220,000

Explanation / Answer

Inventory Purchased on February 1 2017 would be recorded at $ 185000

Inventory is being revaluaed on December 31 at lower o cost or NRV which is 185000

Answer

185000

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