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17 September, 19:58

Jones Company's inventory cost is $100. The expected sales price is $110, estimated selling costs are $12. Consistent with the lower of cost and net realizable value approach, this inventory item should be valued at

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  1. 17 September, 20:20
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    inventory item should be valued at $98.00

    Explanation:

    IAS 2 required inventory to be carried at the lower of cost and net realizable value.

    Net Realisable Value is estimated selling price of inventory - Cost to sell

    Net Realisable Value = ($110 - $12) = $98.00

    Cost = $100.00

    The lower is NRV

    Therefore the cost is $98.00
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