A company like Golf USA that sells golf-rotated inventory typically will have in

Question

A company like Golf USA that sells golf-rotated inventory typically will have inventory Items such as gr clothing and golf equipment As technology advances the design and performance of the next generation drivers, the older models become less marketable and therefore decline in value. Suppose that In 2015. PH (a manufacturer of golf dubs) Introduces the MegaDriver II, the new and improved version of the MegaDriv Below are amounts related to Golf USA's Inventory at the end of 2015. Calculate ending inventory under lower-of-cost-or-market.

Explanation / Answer

Under general rule closing inventory is always valued at lower of cost or market price Reason of this being we follow convention of prudence, where we provide for all possible losses Inventory Quantity Lower of cost Ending Inventory or market price Shirts 36 61 2196 Mega Driver 16 255 4080 Mega Driver II 31 355 11005 Total 17281

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