A company has the following per unit recorded cost and replacement cost relating to its inventory: Item 1 Item 2 5 units 7 units Cost $50 Cost $60 Item 3 9 units Cost $30 Market $45 Market $65 Market $25 Applying the lower of cost or market method, the reported value of this company's ending inventory if LCM is applied to individual items is $870 $905 $920 $940

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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A company has the following per unit recorded cost and replacement cost relating to its inventory:

- **Item 1**:  
  - 5 units  
  - Cost: $50  
  - Market: $45  

- **Item 2**:  
  - 7 units  
  - Cost: $60  
  - Market: $65  

- **Item 3**:  
  - 9 units  
  - Cost: $30  
  - Market: $25  

Applying the lower of cost or market method, the reported value of this company's ending inventory if LCM is applied to individual items is _____.

- ○ $870
- ○ $905
- ○ $920
- ○ $940
Transcribed Image Text:A company has the following per unit recorded cost and replacement cost relating to its inventory: - **Item 1**: - 5 units - Cost: $50 - Market: $45 - **Item 2**: - 7 units - Cost: $60 - Market: $65 - **Item 3**: - 9 units - Cost: $30 - Market: $25 Applying the lower of cost or market method, the reported value of this company's ending inventory if LCM is applied to individual items is _____. - ○ $870 - ○ $905 - ○ $920 - ○ $940
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