Forge Company,a calendar-year entity,had 6,000 units in its beginning inventory for 20X8.On December 31,20X7,applying the lower-of-cost-or-market (NRV)principle,the units had been adjusted down to $470 per unit from an actual cost of $510 per unit.It was the lower of cost or market (NRV).No additional units were purchased during 20X8.The following additional information is provided for 20X8:
Forge does not have sufficient experience with the seasonal market for its inventory units and assumes that any reductions in market value during the year will be permanent.
-Based on the preceding information,the cost of goods sold for the first quarter is:
A)$636,000
B)$564,000
C)$546,000
D)$624,000

Question

Forge Company,a calendar-year entity,had 6,000 units in its beginning inventory for 20X8.On December 31,20X7,applying the lower-of-cost-or-market (NRV)principle,the units had been adjusted down to $470 per unit from an actual cost of $510 per unit.It was the lower of cost or market (NRV).No additional units were purchased during 20X8.The following additional information is provided for 20X8:
  Forge does not have sufficient experience with the seasonal market for its inventory units and assumes that any reductions in market value during the year will be permanent.
-Based on the preceding information,the cost of goods sold for the first quarter is:
A)$636,000 
B)$564,000 
C)$546,000 
D)$624,000

Quizplus · Accepted Answer

The correct cost of goods sold for the first quarter is $636,000, as indicated by the provided information.

Forge Company,a Calendar-Year Entity,had 6,000 Units in Its Beginning Inventory