Sadowski Video Center accumulates the following cost and market data at December

Question

Sadowski Video Center accumulates the following cost and market data at December 31.

Inventories Categories                                Cost Data                       Market Data

Cameras                                                     $11, 217                          $12,267

Camcorders                                                $8,341                             $8,721

DVDs                                                          $12,435                           $10,935

Compute the lower-of-cost-or-market valuation for Sadowski inventory.

The lower-of-cost-or-market value is: $

Explanation / Answer

It can be calculated by 2 methods

1) If we apply it item wise:

2) If we apply it to tatal inventory:

Lower of Total A orTotal B

Inventories categories Cost Data (A) Market data (B) Lower of A or B Cameras $11, 217 $12,267 $11217 Camcorders $8,341 $8,721 $8341 DVDs $12,435 $10,935 $10935 Total $30493-Ans

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