Montana Co. has determined its year-end inventory on a FIFO basis to be $600,000. Information pertaining to that inventory is as follows: $$\begin{array} { l r r }
\text { Selling price } & \$ 620,000 \
\text { Costs to sell } & 30,000 \
\text { Cost } & 520,000
\end{array}$$ $$\text { What should be the reported value of Montarua's irventory? }$$
A) $600,000.
B) $520,000.
C) $590,000.
D) $620,000.

Question

Montana Co. has determined its year-end inventory on a FIFO basis to be $600,000. Information pertaining to that inventory is as follows: $$\begin{array} { l r r } 
\text { Selling price } & \$ 620,000 \
\text { Costs to sell } & 30,000 \
\text { Cost } & 520,000
\end{array}$$ $$\text { What should be the reported value of Montarua's irventory? }$$
A) $600,000.
B) $520,000.
C) $590,000.
D) $620,000.

Quizplus · Accepted Answer

NRV = $590,000 which is less than cost. Replacement cost is not considered in the valuation.

Montana Co Selling price $620,000 Costs to sell 30,000 Cost 520,000\begin{array} { l r r } \text { Selling price } & \$ 620,000 \\\text { Costs to sell } & 30,000 \\\text { Cost } & 520,000\end{array} Selling price Costs to sell Cost ​$620,00030,000520,000​

Montana Co $\begin{array} { l r r } \text { Selling price } & \$ 620,000 \\\text { Costs to sell } & 30,000 \\\text { Cost } & 520,000\end{array}$