Sunland Company applied FIFO to its inventory and got the following results for its ending inventory. Cameras 115 units at a cost per unit of $69 Blu-ray players 171 units at a cost per unit of $75 iPods 125 units at a cost per unit of $81 The net realizable value of each of these products at year-end was cameras $75, Blu-ray players $51, and iPods $78. Determine the amount of ending inventory at lower-of-cost-or-net realizable value.

The amount of ending inventory at lower-of-cost-or-net realizable value is $27,096.

Explanation:

According to IAS 2, Inventory is measured at the lower of Cost or Net Realizable Value.

For each individual category of Inventory, determine if the valuation should be the Cost or Net Realizable value, then sum up the to totals.

Camera at net realizable value (115 units × $75)            = $8,625

Blu-ray players at net realizable value (171 units × $51) = $8,721

iPods at net realizable value (125 units × $78)               = $9,750

Total Value of Ending Inventory                                      = $27,096

Conclusion :

The amount of ending inventory at lower-of-cost-or-net realizable value is $27,096.

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