Inventory Valuation at Lower of Cost or NRV

Steps:

• Cricket bats: lower of $600 cost or$750 NRV is $600.
• Cricket gloves: lower of $400 cost or$320 NRV is $320.
• Cricket helmets: lower of $900 cost or$1200 NRV is $900.
• Cricket pads: lower of $300 cost or$240 NRV is $240.
• Total value: $600 +$320 + $900 +$240 = $2060.

Why A is correct:

• A ($2060) applies the accounting rule to value each item at the lower of cost or NRV, then sums them.

Why the others are wrong:

• B ($2020): Sums only the costs, ignoring NRV write-downs for gloves and pads.
• C ($2510): Mixes NRVs where higher and costs where lower, violating the consistent lower-of rule.
• D ($2580): Sums all NRVs, which overstates value by using NRV above cost.

Final answer: A