Tommy Co.prepares its estimate of LCM using the net realizable value.Inventory item 101 cost $45 and its current replacement cost is $50.The item is currently selling in the market for $55 and selling costs are estimated to be $6.Tommy expects to earn a profit of $4 on the sale of this item.In its year-end financial statements, Tommy Co.should value this item at:
A)$50
B)$45
C)$49
D)$55

Question

Quizplus · Accepted Answer

The Answer of Tommy Co.prepares its estimate of LCM using the net realizable value.Inventory item 101 cost $45 and its current replacement cost is $50.The item is currently selling in the market for $55 and selling costs are estimated to be $6.Tommy expects to earn a profit of $4 on the sale of this item.In its year-end financial statements, Tommy Co.should value this item at:
A)$50
B)$45
C)$49
D)$55

Tommy CoPrepares Its Estimate of LCM Using the Net Realizable Value