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    angie343536's Avatar
    angie343536 Posts: 14, Reputation: 0
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    #1

    Feb 18, 2008, 11:42 PM
    Ending inventory balance
    Optima Corporation applies the lower of cost or market rule for inventory valuation purposes on an individual product basis. On December 31 2006, the following data was available for its two products:

    Product Quantity Cost/unit Market/unit
    VHS 100 $5.00 $3.20
    DVD 200 $7.50 $8.00

    Based on this information, what should Optima report as its ending inventory balance on its balance sheet on December 31, 2006?
    MaggieMouse's Avatar
    MaggieMouse Posts: 226, Reputation: 8
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    #2

    Feb 20, 2008, 01:40 PM
    Lower of cost or market means choose the lower price, when cost is lower, use cost, and vice versa. 100x3.2+200x7.5
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