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13 October, 00:37

Windsor, Inc. applied FIFO to its inventory and got the following results for its ending inventory. Cameras 106 units at a cost per unit of $64 Blu-ray players 167 units at a cost per unit of $78 iPods 137 units at a cost per unit of $90 The net realizable value of each of these products at year-end was cameras $76, Blu-ray players $54, and iPods $72. Determine the amount of ending inventory at lower-of-cost-or-net realizable value.

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  1. 13 October, 04:10
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    Total Value of ending inventory = $25,666

    Explanation:

    Provided

    Item Cost of Inventory Net Realizable Value Rate Qty. Value

    Cameras $64 $76 $64 106 $6,784

    Blu-ray $78 $54 $54 167 $9,018

    i-Pods $90 $72 $72 137 $9,864

    Total Value of ending inventory = $6,784 + $9,018 + $9,864 = $25,666

    Under lower of cost or net realizable value each item is considered separately and then cost is allocated accordingly.

    Therefore for Cameras we have taken Cost as it is less than NRV

    For Blu-ray Players NRV is less than cost, thus NRV is considered.

    For i-Pods NRV is less than cost, thus NRV is considered.

    Total Value of ending inventory = $25,666
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