WEEK 3 CHAP 5 HW #6-B
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School
Liberty University *
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Course
ACCT211
Subject
Industrial Engineering
Date
Feb 20, 2024
Type
Pages
3
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6.
Award: 3.57 out of 3.57 points
3.57 out of 3.57 points
Score:
Score:
24.97/25
Points
99.88
%
A physical inventory of Liverpool Company taken at December 31 reveals the following.
Item
Units
Per Unit
Cost
Market
Car audio equipment
Speakers
336
$ 91
$ 99
Stereos
251
112
101
Amplifiers
317
87
96
Subwoofers
195
53
42
Security equipment
Alarms
471
151
126
Locks
282
94
85
Cameras
203
311
323
Binocular equipment
Tripods
176
71
85
Stabilizers
161
98
106
Required:
1. Compute the lower of cost or market for the inventory applied separately to each item.
2. If the market amount is less than the recorded cost of the inventory, then record the LCM adjustment to the Merchandise Inventory account.
References
Worksheet
Difficulty: 2 Medium
Learning Objective: 05-P2 Compute the lower of cost or
market amount of inventory.
A physical inventory of Liverpool Company taken at December 31 reveals the following.
Item
Units
Per Unit
Cost
Market
Car audio equipment
Speakers
336
$ 91
$ 99
Stereos
251
112
101
Amplifiers
317
87
96
Subwoofers
195
53
42
Security equipment
Alarms
471
151
126
Locks
282
94
85
Cameras
203
311
323
Binocular equipment
Tripods
176
71
85
Stabilizers
161
98
106
Required:
1. Compute the lower of cost or market for the inventory applied separately to each item.
2. If the market amount is less than the recorded cost of the inventory, then record the LCM adjustment to the Merchandise Inventory account.
Required 1
Required 2
Complete this question by entering your answers in the tabs below.
Compute the lower of cost or market for the inventory applied separately to each item.
Required 1
Required 2
Item
Units
Per Unit
Total
LCM applied to:
Cost
Market
Cost
Market
Entire Inventory
Individual Items
Car audio equipment
Speakers
336
$
91
$
99
$
30,576
$
33,264
$
30,576
Stereos
251
112
101
28,112
25,351
25,351
Amplifiers
317
87
96
27,579
30,432
27,579
Subwoofers
195
53
42
10,335
8,190
8,190
Security equipment
Alarms
471
151
126
71,121
59,346
59,346
Locks
282
94
85
26,508
23,970
23,970
Cameras
203
311
323
63,133
65,569
63,133
Binocular equipment
Tripods
176
71
85
12,496
14,960
12,496
Stabilizers
161
98
106
15,778
17,066
15,778
Total
$285,638
$278,148
$
278,148
$
266,419
Explanation:
1. Item
Units
Per Unit
Total Cost
Total Market
LCM applied to
Items
Cost
Market
Car audio equipment
Speakers
336
$ 91
$ 99
$ 30,576
$ 33,264
$ 30,576
Stereos
251
112
101
28,112
25,351
25,351
Amplifiers
317
87
96
27,579
30,432
27,579
Subwoofers
195
53
42
10,335
8,190
8,190
Security equipment
Alarms
471
151
126
71,121
59,346
59,346
Locks
282
94
85
26,508
23,970
23,970
Cameras
203
311
323
63,133
65,569
63,133
Binocular equipment
Tripods
176
71
85
12,496
14,960
12,496
Stabilizers
161
98
106
15,778
17,066
15,778
Total
285,638
278,148
266,419
Lower of cost or market for inventory applied separately = $266,419
2. To adjust inventory cost to market.
$19,219 = $285,638 −
$266,419
Required 1
Required 2
Complete this question by entering your answers in the tabs below.
Compute the lower of cost or market for the inventory applied separately to each item.
Required 1
Required 2
$
$
$
$
$
Item
Units
Per Unit
Total
LCM applied to:
Cost
Market
Cost
Market
Individual Items
Car audio equipment
Speakers
336
91
99
30,576
33,264
30,576
Stereos
251
112
101
25,351
Amplifiers
317
87
96
27,579
Subwoofers
195
53
42
8,190
Security equipment
Alarms
471
151
126
59,346
Locks
282
94
85
23,970
Cameras
203
311
323
63,133
Binocular equipment
Tripods
176
71
85
12,496
Stabilizers
161
98
106
15,778
Total
Entire Inventory
28,112
25,351
27,579
30,432
10,335
8,190
71,121
59,346
26,508
23,970
63,133
65,569
12,496
14,960
15,778
17,066
$
285,638
$
278,148
$
278,148
$
266,419
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