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Loft Co. reviewed its inventory values for proper pricing at year-end. The following summarizes two inventory items examined for the lower of cost or market:
Loft Co. reviewed its inventory values for proper pricing at year-end. The following summarizes two inventory items examined for the lower of cost or market:
Inventory item #1 | Inventory item #2 | |
Original cost | $210,000 | $400,000 |
Replacement cost | $150,000 | $370,000 |
Net realizable value | $240,000 | $410,000 |
Net realizable value less profit margin | $208,000 | $405,000 |
What amount should Loft include in inventory at year-end, if it uses the total of the inventory to apply the lower of cost or market?
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$613,000
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$520,000
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$650,000
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$610,000
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