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11 March, 15:57

At December 31, 2015, the following information was available from Dole Co.'s accounting records: Cost Retail Inventory, 1/1/2015 $147,000 $ 203,000 Purchases 833,000 1,155,000 Additional markups 42,000 Available for sale $980,000 $1,400,000 Sales for the year totaled $1,050,000. Markdowns amounted to $10,000. Under the lower-of-cost-or-market method, Dole's inventory at December 31, 2015 was

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  1. 11 March, 15:58
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    Dole's inventory at December 31, 2015 = $980,000

    Explanation:

    Data provided in the question:

    Cost Retail

    Inventory, 1/1/2015 $147,000 $203,000

    Purchases 833,000 1,155,000

    Additional markups 42,000

    Available for sale $980,000 $1,400,000

    Total Sales for the year = $1,050,000

    Markdowns = $10,000

    Now,

    Under the lower-of-cost-or-market method,

    the cost of the inventory is recorded at a price lower of the original cost or the retail value.

    Therefore,

    For the given data original cost is less than the retail price i. e ($980,000 < $1,400,000)

    Hence,

    Dole's inventory at December 31, 2015 = $980,000
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