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The following information refer to inventory item A of Company XYZ on December 31, Year 1. Historical cost $200,000 Replacement cost $100,000 Estimated selling price
The following information refer to inventory item A of Company XYZ on December 31, Year 1.
Historical cost $200,000
Replacement cost $100,000
Estimated selling price $170,000
Estimated cost to complete and sell $20,000
Normal profit margin (as % of net realizable value) 20%
Determine the market value for inventory item A under the US GAAP lower-of-cost-or-market rule for inventories.
Determine the lower-of-cost-or-market (LCM) under US GAAP.
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