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A physical inventory of Liverpool Company taken at December 31 reveals the following: Item Per unit Units Cost Market Car audio equipment Speakers 345 $ 90 $ 98 Stereos 260 $ 111 $ 100 Amplifiers 326 $ 86 $ 95 Subwoofers 204 $ 52 $ 41 Security equipment: Alarms 480 $ 150 $125 Locks 291 $ 93 $ 84 Cameras 212 $310 $ 322 Binocular equipment Tripods Stabilizers Required: 185 $ 70 $ 84 170 $ 97 $ 105 a. Calculate the lower of cost or market for the inventory applied separately to each item. b. If the market amount is less than the recorded cost of the inventory, then record the LCM adjustment to the Merchandise Inventory account.

A physical inventory of Liverpool Company taken at December 31 reveals the following: Item Per unit Units Cost Market Car audio equipment Speakers 345 $ 90 $ 98 Stereos 260 $ 111 $ 100 Amplifiers 326 $ 86 $ 95 Subwoofers 204 $ 52 $ 41 Security equipment: Alarms 480 $ 150 $125 Locks 291 $ 93 $ 84 Cameras 212 $310 $ 322 Binocular equipment Tripods Stabilizers Required: 185 $ 70 $ 84 170 $ 97 $ 105 a. Calculate the lower of cost or market for the inventory applied separately to each item. b. If the market amount is less than the recorded cost of the inventory, then record the LCM adjustment to the Merchandise Inventory account.

Survey of Accounting (Accounting I)
Survey of Accounting (Accounting I)
8th Edition
ISBN:9781305961883
Author:Carl Warren
Publisher:Carl Warren
Chapter6: Receivables And Inventories
Section: Chapter Questions
Problem 6.12E: Qualcomm Incorporated (QCOM) is a leading developer and manufacturer of digital wireless...
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A physical inventory of Liverpool Company taken at December 31 reveals the following: Item Per unit Units Cost Market Car audio equipment Speakers 345 $ 90 $ 98 Stereos 260 $ 111 $ 100 Amplifiers 326 $ 86 $ 95 Subwoofers 204 $ 52 $ 41 Security equipment: Alarms 480 $ 150 $125 Locks 291 $ 93 $ 84 Cameras 212 $310 $ 322 Binocular equipment Tripods Stabilizers Required: 185 $ 70 $ 84 170 $ 97 $ 105 a. Calculate the lower of cost or market for the inventory applied separately to each item. b. If the market amount is less than the recorded cost of the inventory, then record the LCM adjustment to the Merchandise Inventory account.
Transcribed Image Text:A physical inventory of Liverpool Company taken at December 31 reveals the following: Item Per unit Units Cost Market Car audio equipment Speakers 345 $ 90 $ 98 Stereos 260 $ 111 $ 100 Amplifiers 326 $ 86 $ 95 Subwoofers 204 $ 52 $ 41 Security equipment: Alarms 480 $ 150 $125 Locks 291 $ 93 $ 84 Cameras 212 $310 $ 322 Binocular equipment Tripods Stabilizers Required: 185 $ 70 $ 84 170 $ 97 $ 105 a. Calculate the lower of cost or market for the inventory applied separately to each item. b. If the market amount is less than the recorded cost of the inventory, then record the LCM adjustment to the Merchandise Inventory account.
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