Intermediate Accounting
1st Edition
ISBN: 9780132162302
Author: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella
Publisher: PEARSON
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Chapter 10, Problem 10.4MC
Simmons, Inc. uses the lower-of-cost-or-market method to value its inventory that is accounted for using the FIFO method Data regarding an item in its inventory is as follows.
| Cost | $26 |
| Replacement cost | 20 |
| Selling price | 30 |
| Cost of completion and disposal | 2 |
| Normal profit margin | 7 |
What is the lower-of-cost-or-market method for this item?
- a. $18
- b. $26
- c. $28
- d. $30
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Intermediate Accounting
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