Answer:
The inventory is valued at $99
Explanation:
The lower of cost and net realizable approach to valuing inventory is used at year end to value stock of inventory and it involves valuing the closing stock at the lower of cost price and net realizable value(NRV).
The net realizable value is the expected sales price less the cost of making the sale.
The cost price is $100
NRV=$110-($110*10%)=$99
Since the NRV is lower,the inventory item is valued at $99 per item of inventory.
Answer:
$99
Explanation:
Given that
Expected sales price = 110
Sales cost is 10% of sales price = 110 × 10%
= 110 × 0.1
= 11
Recall that
Net realizable value = expected sales prices - total selling cost
NRV = 110 - 11
NRV = 99
Thus, the inventory should be valued at $99.
