In applying the lower of cost and net realizable value rule,the inventory of surgical equipment would be valued at:
A)$230.
B)$240.
C)$170.
D)$152.

Question

Quizplus · Accepted Answer

The lower of cost and net realizable value rule states that inventory should be valued at either its cost or its net realizable value, whichever is lower. In this case, the cost of the surgical equipment is $230 and its net realizable value is $170 (selling price of $200 - cost of disposal $30). Therefore, the equipment should be valued at $170, which is lower than its cost. Thus, option C is the correct choice.

In Applying the Lower of Cost and Net Realizable Value