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Acme, Inc. stocks a number of different items of inventory. With respect to one item,...

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Accounting

Acme, Inc. stocks a number of different items of inventory. With respect to one item, a water pump (Model X-1500) used in ultra high-pressure applications. Unfortunately, a competitor has introduced a newer design which has become quite popular, lowering demand for the X-1500. The relevant data is as follows:

Original Cost: $650

Replacement Cost: $475

Net Realizable Value: $500

Normal Profit Margin: 20%

What value should Acme use for the X-1500 on its current balance sheet?

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