Answer:
The inventory value of the company amounts to $473,000 using the approach of lower of cost or market.
Explanation:
The approach of lower of cost or market states that the business need to record the inventory or merchandise cost at whichever cost is lower or low, the current market price or the original cost of the inventory.
So, in this case,
Evaluating the inventory value as:
Small Market $64,000 $61,000
Medium Market $290,000 $260,000
Large Market $152,000 $167,000
So, from small market, the lowest value is $61,000, from the medium market, the lowest value is $260,000 and the from the large market, the lowest value is $152,000. Therefore, the inventory value is as:
Inventory value = $61,000 + $260,000 + $152,000
Inventory value = $473,000
