Pair Company sells one product and uses the last-in, first-out (LIFO) method to determine inventory cost. Information for the month of January follows: Beginning inventory, 1/1 Purchases, 1/4 Sales Units 3,000 8,000 7,500 Unit Cost $ 4.70 $ 3.90 Pair has determined that at January 31 the replacement cost of its inventory was $4 per unit and the net realizable value was $4.90 per unit. Pair's normal profit margin is $1 per unit. Pair applies the lower of cost or market rule to total inventory and records any resulting loss. At January 31, what should be the net carrying amount of Pair's inventory?
Pair Company sells one product and uses the last-in, first-out (LIFO) method to determine inventory cost. Information for the month of January follows: Beginning inventory, 1/1 Purchases, 1/4 Sales Units 3,000 8,000 7,500 Unit Cost $ 4.70 $ 3.90 Pair has determined that at January 31 the replacement cost of its inventory was $4 per unit and the net realizable value was $4.90 per unit. Pair's normal profit margin is $1 per unit. Pair applies the lower of cost or market rule to total inventory and records any resulting loss. At January 31, what should be the net carrying amount of Pair's inventory?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Pair Company sells one product and uses the last-in, first-out (LIFO) method to determine inventory cost. Information for the month of January follows:
Beginning inventory, 1/1
Purchases, 1/4
Sales
Units
3,000
8,000
7,500
Unit Cost
$ 4.70
$ 3.90
Pair has determined that at January 31 the replacement cost of its inventory was $4 per unit and the net realizable value was $4.90 per unit. Pair's normal
profit margin is $1 per unit. Pair applies the lower of cost or market rule to total inventory and records any resulting loss. At January 31, what should be the net
carrying amount of Pair's inventory?
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