On balance day, a physical inventory count and cost was $10,250, and the market value of inventory was $10,180. At what figure will the inventory be shown in the balance sheet? $10,250$10,180$10,215None of the above.

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Description: On balance day, a physical inventory count and cost was $10,250, and the market value of inventory was $10,180. At what figure will the inventory be shown in the balance sheet? $10,250$10,180$10,215None of the above.

Answered: On balance day, a physical inventory…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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On balance day, a physical inventory count and cost was $10,250, and the market value of inventory was $10,180. At what figure will the inventory be shown in the balance sheet?

$10,250
$10,180
$10,215
None of the above.

Expert Solution

Step 1

Note: As per relevant Standard, inventory is valued at lower of cost or Net relizable value.

where,

Net relizable value = market value of inventory - Cost to be incurred for selling of the goods

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