[RosieJ74]

A company sells four products. They have consistently experienced a profit margin of 20% of sales and expects this rate to hold for the future. This is the most recent year totals as of Dec 31

Product Original Cost Cost to Replace Est. Cost to Sell Exp Selling Prices
I $60 $70 $10 $100
II 70 90 20 120
III 80 60 10 60
IV 90 80 20 90

WHat is the reported inventory value at Dec 31 for Product IV?

A. 60 B. 70 C. 80 D. 90

I thought it was A, initially. I had somebody tell me it was C, but it was wrong.

I got A from 90 + 80 - 20 - 90 = 60

but then again D could be the answer because the original cost is the same as the sale price