Gem Company measured inventory at the lower of cost andProblem 12-13 (IAA)net realizable value. Data regarding the items in theinventory are:MarkersPensHighlightersHistorical costSeliing priceEstimated cost to completeReplacement costNormal profit margin as apercentage of selling price240,000360,00048,000208,000188,000250,00050,000168,000300,000360,00068,000318,00025%25%10%What amount should be reported as inventory?a. 720,000b. 728,000c. 676,000d. 694,000000374

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Business

Accounting

What amount should be reported as inventory? a. 720,000 b. 728,000 c. 676,000 000.00 00.00

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter8: Inventories: Special Valuation Issues

Section: Chapter Questions

Problem 2RE: Black Corporation uses the LIFO cost flow assumption. Each unit of its inventory has a net...

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Concept explainers

Inventory Accounting

Inventory accounting is that branch of accounting that helps in determining the specific value of assets at different stages of production and development.

Question

Gem Company measured inventory at the lower of cost and
Problem 12-13 (IAA)
net realizable value. Data regarding the items in the
inventory are:
Markers
Pens
Highlighters
Historical cost
Seliing price
Estimated cost to complete
Replacement cost
Normal profit margin as a
percentage of selling price
240,000
360,000
48,000
208,000
188,000
250,000
50,000
168,000
300,000
360,000
68,000
318,000
25%
25%
10%
What amount should be reported as inventory?
a. 720,000
b. 728,000
c. 676,000
d. 694,000
000
374

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