Cruz Video Center accumulates the following cost and net realizable data at December 31....

Question:

Cruz Video Center accumulates the following cost and net realizable data at December 31.

Inventory categories Cost data Net Realizable Value Data
Cameras $18,000 $18,450
Camcorders $14,250 $14,550
Blu-ray players $21,000 $19,350

Compute the lower-of-cost-or-net-realizable value valuation for the company's total inventory.

Inventory Measurement:

In accounting, there is a standard used to measure the inventory of a company. This is the International Accounting Standards (IAS) 12 which mandates that inventories must be measured at the lower of cost or net realizable value.

Answer and Explanation:

The lower-of-cost-or-net-realizable value is $51,600.

We have to identify the lower amount between the cost and the net realizable value for each...

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What Is Inventory? - Definition & Example

from Business 112: Operations Management

Chapter 13 / Lesson 7
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