Compute the lower-of-cost-or-market valuation for Olsson inventory.?

1) Olsson Video Center accumulates the following cost and market data at December 31.

Inventory

Cameras $12,136(Cost Data) $13,236 (Market Data)

Camcorders 8,357(Cost Data) 8,707 (Market Data)

DVDs 12,445(Cost Data) 11,435 (Market Data)

Compute the lower-of-cost-or-market valuation for Olsson inventory.

3 Answers

  • It depends on how you want to apply it. If it is applied to each separate category (normally used):

    Inventory

    Cameras $12,136(Cost Data)

    Camcorders 8,357(Cost Data)

    DVDs 11,435 (Market Data)

    LCM = $31,938

    If it is applied to the total inventory:

    Inventory

    Cameras . . . . $12,136(Cost Data) $13,236 (Market Data)

    Camcorders . . . .8,357(Cost Data) . 8,707 (Market Data)

    DVDs . . . . . . . 12,445(Cost Data) .11,435 (Market Data)

    = . . . . . . . . . .$32,938 . .. . . . . . .$33,378

    LCM = $32,938

  • you take the lowest of each item and add them up, thats your answer

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