**Inventory Analysis for Liverpool Company**This exercise addresses inventory valuation using the Lower of Cost or Market (LCM) method, based on a physical inventory count at Liverpool Company as of December 31.**Inventory Details:**| Item | Units | Per Unit Cost | Per Unit Market ||------------------------------|-------|---------------|-----------------|| **Car Audio Equipment** | | | || - Speakers | 335 | $90 | $98 || - Stereos | 250 | $111 | $100 || - Amplifiers | 316 | $86 | $95 || - Subwoofers | 194 | $52 | $41 || **Security Equipment** | | | || - Alarms | 470 | $150 | $125 || - Locks | 281 | $93 | $84 || - Cameras | 202 | $310 | $322 || **Binocular Equipment** | | | || - Tripods | 175 | $70 | $84 || - Stabilizers | 160 | $97 | $105 |**Requirements:**1. Calculate the lower of cost or market for each inventory item.2. If the market value is less than the recorded cost, record the LCM adjustment to the Merchandise Inventory account.**Instructions:**- Enter your calculations in the corresponding tabs labeled "Required 1" and "Required 2".- Determine the LCM on a per unit basis and apply to the inventory account as required.This task involves assessing whether a reduction in the inventory value is necessary, impacting the financial statements to ensure that inventory is not overstated.

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Description: **Inventory Analysis for Liverpool Company**This exercise addresses inventory valuation using the Lower of Cost or Market (LCM) method, based on a physical inventory count at Liverpool Company as of December 31.**Inventory Details:**| Item

Journal: Recording of a business transactions in a chronological order.

Business

Accounting

A physical inventory of Liverpool Company taken at December 31 reveals the following. Per Unit Item Units Cost Market Car audio equipment Speakers Stereos 335 $ 90 $ 98 250 111 100 Amplifiers Subwoofers 316 86 95 194 52 41 Security equipment Alarms Locks 470 150 125 281 93 84 Cameras 202 310 322 Binocular equipment Tripods Stabilizers 175 70 84 160 97 105 Required: 1. Calculate 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.

A physical inventory of Liverpool Company taken at December 31 reveals the following. Per Unit Item Units Cost Market Car audio equipment Speakers Stereos 335 $ 90 $ 98 250 111 100 Amplifiers Subwoofers 316 86 95 194 52 41 Security equipment Alarms Locks 470 150 125 281 93 84 Cameras 202 310 322 Binocular equipment Tripods Stabilizers 175 70 84 160 97 105 Required: 1. Calculate 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.

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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03:02:04 A physical inventory of Liverpool Company taken at December 31 reveals the following. Item Car audio equipment Speakers Stereos Amplifiers. Subwoofers Security equipment Alarms Locks Cameras Binocular equipment Tripods Stabilizers Required 1 No Units 1 336 251 317 195 Date 471 282 203 December 31 176 161 Per Unit Cost $.91 112 87 53 151 94 311 71 98 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. Market Complete this question by entering your answers in the tabs below. Required 2 If the market amount is less than the recorded cost of the inventory, then record the LCM adjustment to the Merchandise Inventory account. $.99 101 96 42 126 85 323 Cost of goods sold Merchandise inventory 85 106 Answer is complete but not entirely correct. < Required 1 General Joumal Required 2 ✔ Debit 266,419…
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