Problem:The December 31, 2007 inventory of Dwyer Corporation consisted of four products, for which certain information is provided below:
Using the lower of cost or market approach applied on an individual item basis, compute the inventory valuation that should be reported for each product on December 31, 2007.
| Product |
Orgininal Cost |
Replacement cost |
Estimated Disposal Cost |
Expected Selling Price |
Normal profit on sales |
| A |
$25.00 |
$22.00 |
$6.50 |
$40.00 |
20% |
| B |
$42.00 |
$40.00 |
$12.00 |
$48.00 |
25% |
| C |
$120.00 |
$115.00 |
$25.00 |
$190.00 |
30% |
| D |
$18.00 |
$15.80 |
$3.00 |
$26.00 |
10% |
The accounting book is Intermediate Accounting by Weygandt and Kiesko, it is the newest edition.