Upon taking a physical count of its inventory, Damber Corp. determines that $5,500 of goods have become damaged due to a water leak in the warehouse. It is decided that $2,300 of the goods are not sellable and the remainder can be sold at a reduced price of $2,750. The cost incurred to sell the goods will be $800. The damaged goods should be included in inventory at a value of:
A)$3,200
B)$3,550
C)$5,050
D)$1,950
E)$450

Question

Quizplus · Accepted Answer

The sellable portion of the damaged goods is valued at the reduced selling price of $2,750 minus the cost to sell of $800, resulting in a net realizable value of $1,950. The unsellable portion is not included in inventory.

Upon Taking a Physical Count of Its Inventory, Damber Corp