The original cost of an item of inventory is above its replacement cost. The item s replacement cost is below its net realizable value but is higher than its net realizable value minus a normal profit. Under the lower of cost or market method, the inventory item should be valued at: a. Net realizable value. b. Original cost. c. Replacement cost. d. Net realizable value less normal profit margin.
The original cost of an item of inventory is above its replacement cost. The item s replacement cost is below its net realizable value but is higher than its net realizable value minus a normal profit. Under the lower of cost or market method, the inventory item should be valued at: a. Net realizable value. b. Original cost. c. Replacement cost. d. Net realizable value less normal profit margin.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:The original cost of an item of inventory is above its replacement
cost. The item s replacement cost is below its net realizable value
but is higher than its net realizable value minus a normal profit.
Under the lower of cost or market method, the inventory item
should be valued at:
a. Net realizable value.
b. Original cost.
c. Replacement cost.
d. Net realizable value less normal profit margin.
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