Question

Data related to the inventories of Alpine Ski Equipment and Supplies is presented below: Selling price Cost Replacement cost Sales commission Skis $179,000 144,000 116,000 10% Boots $150,000 145,000 124,000 10% Apparel $108,000 70,200 90,200 10% Supplies $72,000 46,800 42,800 10% In applying the lower of cost or net realizable value rule, the inventory of boots would be valued at:

Answer 1

	Selling price	Sales commission (10% of selling price)	Net realizable value [ Selling price - Sales commission ] (a)	Cost (b)	Inventory value [ Lower of a or b ]
Boots	150000	15000	135000	145000	135000
Answer : $135,000