Brooks Company carries three inventory items. The following information pertains to the ending inventory: Unit Unit Item Quantity Cost Market Value A 120 $ 60 $ 55 F 170 80 75 K 110 30 40 Required a. Determine the ending inventory that Brooks will report on the balance sheet, assuming that it applies the lower-of-cost-or-market rule to individual inventory items.

$22,650

Explanation:

The computation of the ending inventory is given below:

item      quantity       unit cost   unit               lower unit   lower value

A              120              $60            $55              $55               $6600

B            170                  80             75                  75           12,750

C            110                   30             40                 30                 3,300

Total $22,650

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