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Problem - Banovic Company applied FIFO to its inventory and got the following results for its ending inventory.
Tennis shoes 100 units at a cost per unit of $68
Running shoes 150 units at a cost per unit of $75
Basketball shoes 125 units at a cost per unit of $80
The net realizable value per unit at year-end was tennis shoes $70, running shoes $71, and basketball shoes $74. Determine the amount of ending inventory at lower-of-cost-or-net realizable value. Explain how prudence concept is applied to inventory valuation.
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