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Data related to the inventories of Alpine Ski Equipment and Supplies is presented below: Skis Boots Apparel Supplies Selling price $168,000 $151,000 $103,000 $66,000 Cost 139,000 142,000 72,100 42,900 Replacement cost 133,000 124,000 92,100 38,900 Sales commission 10% 10% 10% 10% In applying the lower of cost or net realizable value rule
Data related to the inventories of Alpine Ski Equipment and Supplies is presented below:
Skis Boots Apparel Supplies Selling price $168,000 $151,000 $103,000 $66,000 Cost 139,000 142,000 72,100 42,900 Replacement cost 133,000 124,000 92,100 38,900 Sales commission 10% 10% 10% 10%
In applying the lower of cost or net realizable value rule. the inventory of skis would be valued at:
Expert Solution
The inventory of skies will be valued at Net Realizable Value or Cost whichever is less.
Here,
Net Realizable Value (NRV) = Selling Price - Sales Commission
= $168,000-($168,000*10%)
= $168,000- $16,800
NRV = $151,200
Cost = $ 139,000
Therefore Value of inventory is $139,000
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