Pronghorn Company follows the practice of pricing its inventory at the lower-of-
ID: 2392250 • Letter: P
Question
Pronghorn Company follows the practice of pricing its inventory at the lower-of-cost-or-market, on an individual-item basis.
Item No.
Quantity
Cost per Unit
Cost to Replace
Estimated Selling Price
Cost of Completion and Disposal
Normal Profit
From the information above, determine the amount of Pronghorn Company inventory.
Item No.
Quantity
Cost per Unit
Cost to Replace
Estimated Selling Price
Cost of Completion and Disposal
Normal Profit
1320 1,500 $3.87 $3.63 $5.45 $0.42 $1.51 1333 1,200 3.27 2.78 4.24 0.61 0.61 1426 1,100 5.45 4.48 6.05 0.48 1.21 1437 1,300 4.36 3.75 3.87 0.30 1.09 1510 1,000 2.72 2.42 3.93 0.97 0.73 1522 800 3.63 3.27 4.60 0.48 0.61 1573 3,300 2.18 1.94 3.03 0.91 0.61 1626 1,300 5.69 6.29 7.26 0.61 1.21Explanation / Answer
Item No. Quantity Cost per Unit Cost to Replace Estimated Selling Price Cost of Completion and Disposal Normal Profit NRV NRV less normal profit Market Lower of cost or market Inventory value 1320 1,500 $3.87 $3.63 $5.45 $0.42 $1.51 $5.03 $3.52 $3.63 $3.63 $5,445 1333 1,200 3.27 2.78 4.24 0.61 0.61 $3.63 $3.02 $3.02 $3.02 $3,624 1426 1100 5.45 4.48 6.05 0.48 1.21 $5.57 $4.36 $4.48 $4.48 $4,928 1437 1,300 4.36 3.75 3.87 0.3 1.09 $3.57 $2.48 $3.57 $3.57 $4,641 1510 1000 2.72 2.42 3.93 0.97 0.73 $2.96 $2.23 $2.42 $2.42 $2,420 1522 800 3.63 3.27 4.6 0.48 0.61 $4.12 $3.51 $3.51 $3.51 $2,808 1573 3,300 2.18 1.94 3.03 0.91 0.61 $2.12 $1.51 $1.94 $1.94 $6,402 1626 1,300 5.69 6.29 7.26 0.61 1.21 $6.65 $5.44 $6.29 $5.69 $7,397 Total $37,665 The amount of Pronghorn Company’s inventory $37665
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