1. Teel Distribution Co. has determined its December 31, 2007 inventory on a FIFObasis at $250,000. Information pertaining to that inventory follows:$255,000|Estimated selling priceEstimated cost of disposal/completion10,000Normal profit marginCurrent replacement cost30,000225,000Teel records losses that result from applying the lower-of-cost-or-market rule. AtDecember 31, 2007, the loss that Teel should recognize isb. $5,000c. $20,000d. $25,000

The Inventory valuation and loss on valuation has been computed as above.

Answered: 1. Teel Distribution Co. has determined…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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At 12/31/20, the end of Lincoln Company's first year of business, inventory was $6,100 and $5,100 at cost and at market, respectively. Following is data relative to the 12/31/21 inventory of Lincoln: Original Net Net Realizable Appropriate Cost Replacement Realizable Value Less Inventory Item Per Unit Cost Value Normal Profit Value A $ .65 $ .45 B .45 .40 C .70 .75 D .75 .65 E .90 .85 Selling price is $1.00/unit for all items. Disposal costs amount to 10% of selling price and a "normal" profit is 30% of selling price. There are 1,500 units of each…
During 20x3, Pryor Company changed its inventory method from the LIFO to FIFO. The beginning inventory under FIFO is $20,000 higher than under LIFO. Prepare the journal entry to record this accounting change. Ignore income tax.
Refer to the photo
Poe, Co. uses LIFO for its inventory valuation. The original cost of Item #BB-8, the only inventory item of Poe, was $12,000. The current selling price and replacement cost are $13,500 and $9,500, respectively. Costs to sell are estimated to be $2,700. The normal profit margin is 10% of the original cost.
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Ward Distribution Company has determined its year-end inventory on a LIFO basis at $320,000. Information pertaining to that inventory follows. Item Amount Estimated selling price $332,800 Estimated cost of disposal 16,000 Normal profit margin 48,000 Current replacement cost 304,000 What is the loss that Ward should recognize? Assume no previously recorded inventory holding loss. Select one: a. $0 b. $3,200 c. $16,000 d. $51,200 O
BE6-10 Johal Company counted and recorded its ending inventory as at December 31, 2002, incor- rectly, understating its correct value by $25,000. Assuming that this misstatement was not discov- ered and corrected, what is the impact of this error on assets, liabilities, and owner's equity at the end of 2002? At the end of 2003? rket data at December 31:

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