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Birk Camera Shop Inc. uses the lower-of-cost-or-market basis for its inventory. The following data are available at December 31.

Units
Cost/Unit
Market Value/Unit
Cameras
Minolta 5 $170 $158
Canon 7 145 152
Light Meters
Vivitar 12 125 114
Kodak 10 120 135

What amount should be reported on Brik Camera Shop's financial statements, assuming the lower-of-cost-or-market rule is applied?

Respuesta :

Answer:

$4,373

Explanation:

we will check lower of cost or market for individual items:

Minolta :

= Market value per unit × No. of units

= 158 × 5

= $790

Canon :

= Cost per unit × No. of units

= 145 x 7

= $1,015

Vivitar:

=  Market value per unit × No. of units

= 114 x 12

= $1,368

Kodak:

= Cost per unit × No. of units

= 120 x 10

= $1,200

Total amount should be reported on Brik Camera Shop's financial statements:

= $790  + $1,015  + $1,368  + $1,200

= $4,373

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