(a) Tracy Company sells three different types of home heating stoves (gas, wood, and pellet). The cost and market value of its inventory of stoves are as follows.
|
Cost |
Market |
|
|
Gas |
$ 84,000 |
$ 79,000 |
|
Wood |
250,000 |
280,000 |
|
Pellet |
112,000 |
101,000 |
Determine the value of the company”s inventory under the lower of cost or market approach.
Determine whether cost or market value is lower for each inventory type.
Sum the lowest value of each inventory type to determine the total value of inventory.