Clarkson is a distributor of produce who uses FIFO and has the following information at December 31, 2024: Inventory at cost $1,000,000 Inventory in transit shipped FOB destination from a vendor 600,000 Non-cancelable purchase orders expected to be received in 2025 2,100,000 Cancelable purchases orders expensed to be received in 2026 3,200,000 The expected selling price of the produce is 99% of its cost. The cost of delivery to customers is 2% of the selling price and Clarkson does pay these costs, which is not reimbursed by customers. 

Required: Determine ending inventory on December 31, 2025, based on lower of cost of net realizable value.

Answer rating: 100% (QA)

Determining Ending Inventory on December 31 2025 Clarkson uses the lower of cost or net realizable value NRV method for valuing inventory Heres how to ... View the full answer