PE 7-6B Lower-of-cost-or-market method

On the basis of the following data, determine the value of the inventory at the lower of cost or market. Apply lower of cost or market to each inventory item, as shown in Exhibit 9.


Item
Inventory
Quantity
Unit
Cost Price
Unit
Market Price
JFW1 6,330 $10 $11
SAW9 1,140 36 34


Answer:

Commodity
Inventory
Quantity
Unit
Cost
Price
Unit
Market
Price
Total
Cost Market
Lower of
C or M
JFW1 6,330 $10 $11 $ 63,300 $ 69,630 $ 63,300
SAW9 1,140 36 34 41,040 38,760 38,760
Total $104,340 $108,390 $102,060