The December 31 inventory of Madigan Company consisted of one product, with information below. # of units
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The December 31 inventory of Madigan Company consisted of one product, with information below.
# of units Cost Replacement cost Selling price Selling costs Normal profit
210 $5.75 $5.25 $8.00 $1.50 $1.00
(1) Compute the total ending inventory (in dollars) that should appear on the Dec. 31 balance sheet, assuming the lower of cost or market approach (LCM) is applied.
(2) The LCNRV method is the default method for most industries. Under what circumstances is the LCM method appropriate?
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