Answer:
R.A. Mona's Pet Shop
Lower of Cost or Market (LCM):
= $2,200
Explanation:
a) Data and Calculations:
Mona’s Pet Store
Per unit
Inventory Items  Units   Cost    Market   Total Cost   Total Market
Puppies        11       50       100    $550
Turtles         12      25        20                 $240
Fish           40       8         7                  280
Parrots         10     100      250     1,000
Cats          26      10         5                  130
Total cost                           $1,550        $650 = $2,200
b) The Pet Shop will report a total inventory value of $2,200 based on the  Lower of Cost or Market Price computed above.  The choice to report inventory value based on the LCM ensures that the value of inventory is not overstated above its net realizable value.  This practice accords with conservative method of accounting.
