Question

g Hagger Sounds has accumulated the following cost and market data on March 31: Cost Data Market Data iPods $24,000 $20,400 Cell phones 18,000 19,000 DVDs 28,000 25,600 Using the lower-of-cost-or-market, how much is the value of the ending inventory?

Answer 1

Answer:

The value of the ending inventory is $64000

Answer 2

Answer:

$64,000

Explanation:

The accounting standards guiding the accounting for inventory requires that inventory is first recognized at cost which includes the cost of the item and other associated cost (such as freight) necessary for getting the item to the location of sale/storage.

Subsequently, inventory is to be carried at the lower of cost or net realizable value or market value. Where the cost is higher than the net realizable value or market value,

Given;

                        Cost Data              Market Data           Inventory amount

iPods                 $24,000                   $20,400               $20,400

Cell phones      $18,000                    $19,000                $18,000

DVDs                $28,000                   $25,600                $25,600

Total                                                                                 $64,000