The bridal gift shop company has 12 units in ending merchandise inventory on december 31. the units were purchased in november forâ $150 each. the price lists from suppliers indicate the current replacement cost of the item to beâ $152 each. what would be the amount reported as merchandise inventory on the balanceâ sheet?

$1,800

Explanation:

According to the accounting principle, the inventory should be valued at lower of cost or net realizable value. The calculation is shown below:

Based on acquisition cost

12 units × $150 = $1,800

Ending inventory = $1,800

Based on current replacement cost

12 units × $152 = $1,824

Ending inventory = $1,824

As we see that the lower cost would be $1,800. So, $1,800 would be reported to the ending inventory

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"we first find value of tax in dollars.

the difference between the two prices   is: 23. 54 - 22 = 1.54

therefore the sales tax in dollars is 1.54

the tax % will be   (amount of tax / original cost price ) × 100

(1.54 / 22) × 100  → (0.07) × 100 =   7

so the tax rate is 7%

we can double check the answer.

7 % of 22   → (7/100) × 22 → 0.07 × 22 = 1.54

22 + 1.54 = 23.54"