digital camera shop inc. uses the lower - of - cost - or - net realizable value basis for its inventory. the…

digital camera shop inc. uses the lower - of - cost - or - net realizable value basis for its inventory. the following data are available at december 31.\nitem units unit cost net realizable value\ncameras:\nminolta 5 $170 $158\ncanon 7 145 152\nlight meters:\nvivitar 12 125 114\nkodak 10 120 135\nwhat amount should be reported for inventory on digital camera shops balance sheet, assuming the lower - of - cost - or - net realizable value rule is applied?

digital camera shop inc. uses the lower - of - cost - or - net realizable value basis for its inventory. the following data are available at december 31.\nitem units unit cost net realizable value\ncameras:\nminolta 5 $170 $158\ncanon 7 145 152\nlight meters:\nvivitar 12 125 114\nkodak 10 120 135\nwhat amount should be reported for inventory on digital camera shops balance sheet, assuming the lower - of - cost - or - net realizable value rule is applied?

Answer

Explanation:

Step1: Calculate cost - net realizable value for Minolta

Multiply units by lower value. For Minolta, lower value is $158$. So $5\times158 = 790$.

Step2: Calculate for Canon

Lower value for Canon is $145$. So $7\times145=1015$.

Step3: Calculate for Vivitar

Lower value for Vivitar is $114$. So $12\times114 = 1368$.

Step4: Calculate for Kodak

Lower value for Kodak is $120$. So $10\times120=1200$.

Step5: Sum up the values

$790 + 1015+1368 + 1200=4373$.

Answer:

$4373$