Result from applying the lower-of-cost-or-market rule

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Reference no: EM131256761

Ryan Distribution Co. has determined its December 31, 2010 inventory on a FIFO basis at $250,000. Information pertaining to that inventory follows:

Estimated selling price $255,000

Estimated cost of disposal 10,000

Normal profit margin 30,000

Current replacement cost 225,000

Ryan records losses that result from applying the lower-of-cost-or-market rule. At December 31, 2010, the loss that Ryan should recognize is

a. $0.

b. $5,000.

c. $20,000.

d. $25,000.

Reference no: EM131256761

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