A company's total cost of FIFO inventory was $329,000 and its current replacement cost is $307,000....

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Question

A company's total cost of FIFO inventory was $329,000 and its current replacement cost is $307,000....

A company's total cost of FIFO inventory was $329,000 and its current replacement cost is $307,000. Under the lower cost or market, the amount reported should be $329,000.

True or False.

business accounting

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Answer 1

Answer #1

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--FALSE.

>Under lower cost or market value, the inventory is reported at cost or market value whichever is LOWER.

>Here, Replacement cost or Market value is $ 307000 while cost as per FIFO is $ 329000. Market value of $ 307000 is lower.

>Hence, amount to be reported should be $ 307,000 (not $ 329000)

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Answer 2

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