Picton Co Prepares Its Estimate of LCM Using the Net Realizable

question 132

Multiple Choice

Picton Co. prepares its estimate of LCM using the net realizable value. Inventory item X570 cost $45 and the item is currently selling in the market for $55 and selling costs are estimated to be $6. Picton expects to earn a profit of $4 on the sale of this item. In its year-end financial statements, Picton Co. should value this item at:

• A) $49
• B) $55
• C) $45
• D) $50

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