Question
Castle TV, Incorporated purchased 3,000 monitors on January 5 at a per-unit cost of $238, and another 3,000 units on January 31 at a per-unit
Castle TV, Incorporated purchased 3,000 monitors on January 5 at a per-unit cost of $238, and another 3,000 units on January 31 at a per-unit cost of $310. In the period from February 1 through year-end, the company sold 5,450 units of this product. At year-end, 550 units remained in inventory.
Assume that the replacement cost of this monitor at year-end is $302 per unit. Using the first-in, first-out (FIFO) flow assumption and the lower-of-cost-or-market rule, Castle TV should write down the carrying value of this inventory by:
Multiple Choice
$6,600.
$4,400.
$0.
$2,200.
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