why is the answer $25,000 WhEE B GoFen\'s ending inventory at retail? A) $34,400

Question

why is the answer $25,000

WhEE B GoFen's ending inventory at retail? A) $34,400 B) $36,000. C) $37.600. D) $38.400 24. Ryan Distribution Co. has determined its December 31, 2010 inventory on a Fl FO basis at $250,000. Information pertaining to that inventory follows Estimated selling price Estimated cost of disposal Normal profit margin Current replacement cost $255,000 10,000 30,000 225,000 Ryan records losses that result from applying the lower-of-cost-or-market rule. At December 31, 2010, the loss that Ryan should recognize is A) so. B) $5,000. C) $20,000. D) $25,000.

Explanation / Answer

Answer : Loss of $ 25,000

Explanation to the answer

Here in the sum we have provided that Ryan Distribution Co. has determined its December 31, 2010 inventory on a FIFO basis at $250,000 and we have also been given in the sum that Ryan records losses that result from applying the lower-of-cost-or-market rule So we should consider the current replacement cost and it is $ 225,000 and we should not consider current selling price

the calculation of loss will be as follow

Partiular Amount in $ Current replacement cost 225,000 Less: FIFO basis valuation at 250,000 Record a Loss -25,000

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