Based on a physical inventory taken on December 31. 2019. City Company determined its chocolate inventory on a FIFO basis at 26,000. City estimated that, after further processing costs of 12,000, the chocolate could be sold as finished candy bars for 40,000. City's normal profit margin is 10% of sales. REQUIRED: Under the lower of cost and net realizable value rule. What amount should City Company report as chocolate inventory on its December 31, 2019 statement of financial position?
Based on a physical inventory taken on December 31. 2019. City Company determined its chocolate inventory on a FIFO basis at 26,000. City estimated that, after further processing costs of 12,000, the chocolate could be sold as finished candy bars for 40,000. City's normal profit margin is 10% of sales. REQUIRED: Under the lower of cost and net realizable value rule. What amount should City Company report as chocolate inventory on its December 31, 2019 statement of financial position?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Based on a physical inventory taken on December 31. 2019. City Company determined its chocolate inventory on a FIFO basis at 26,000. City estimated that, after further processing costs of 12,000, the chocolate could be sold as finished candy bars for 40,000. City's normal profit margin is 10% of sales.
REQUIRED:
Under the lower of cost and net realizable value rule. What amount should City Company report as chocolate inventory on its December 31, 2019 statement of financial position ?
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