Answered

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Oriole Company developed the following information about its inventories in applying the lower-of-cost-or-net-realizable-value(LCNRV) basis in valuing inventories:
Product Cost Net realizable value
Market A $128000 $134000
B 90000 85000
C 179000 181000
After Oriole Company applies the LCNRV rule, the value of the inventory reported on the balance sheet would be:___.
a. $405000.
b. $392000.
c. $400000.
d. $397000.

Sagot :

Answer:

b. $392000.

Explanation:

The computation of the inventory balance reported on the balance sheet is shown below:

Product                   Cost                   Net realizable value    Lower value

A                            $128000                 $134000                     $128,000

B                             $90,000                 $85,000                    $85,000

C                             $179,000                $181,000                    $179,000

Total                                                                                          $392,000

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