A Retail Company sells various products related to pop culture. Since trends change the market price for items also changes. Review the book cost and market replacement cost for the retail company's inventory items and answer the questions below regarding LCM. Inventory Item # of units (Quantity) Book unit cost Market unit cost $9 Product 1 100 $ 11 Product 2 200 $ 6 $ 4 Product 3 150 $ 3 $ 5 Product 4 400 $ 15 $ 14 You can assume the adjustment (if any) is relatively small and not related to an unusual or extraordinary circumstance. What is the dollar amount of the adjustment? $ What is the DEBIT account of the journal entry? What is the CREDIT account of the journal entry?
A Retail Company sells various products related to pop culture. Since trends change the market price for items also changes. Review the book cost and market replacement cost for the retail company's inventory items and answer the questions below regarding LCM. Inventory Item # of units (Quantity) Book unit cost Market unit cost $9 Product 1 100 $ 11 Product 2 200 $ 6 $ 4 Product 3 150 $ 3 $ 5 Product 4 400 $ 15 $ 14 You can assume the adjustment (if any) is relatively small and not related to an unusual or extraordinary circumstance. What is the dollar amount of the adjustment? $ What is the DEBIT account of the journal entry? What is the CREDIT account of the journal entry?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![**LCM: LOWER OF COST OR MARKET**
A retail company sells various products related to pop culture. Since trends change, the market price for items also changes.
Review the book cost and market replacement cost for the retail company's inventory items and answer the questions below regarding LCM.
| Inventory Item | # of units (Quantity) | Book unit cost | Market unit cost |
|----------------|-----------------------|----------------|------------------|
| Product 1 | 100 | $9 | $11 |
| Product 2 | 200 | $6 | $4 |
| Product 3 | 150 | $3 | $5 |
| Product 4 | 400 | $15 | $14 |
You can assume the adjustment (if any) is relatively small and not related to an unusual or extraordinary circumstance.
1. What is the dollar amount of the adjustment? $ [ ]
2. What is the DEBIT account of the journal entry? [ ]
3. What is the CREDIT account of the journal entry? [ ]](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F75227c3d-0045-449f-908c-0dff54e4e54b%2Fb625af9c-26c5-406c-a2ed-ce3b01d4d747%2F2b48t61p_processed.jpeg&w=3840&q=75)
Transcribed Image Text:**LCM: LOWER OF COST OR MARKET**
A retail company sells various products related to pop culture. Since trends change, the market price for items also changes.
Review the book cost and market replacement cost for the retail company's inventory items and answer the questions below regarding LCM.
| Inventory Item | # of units (Quantity) | Book unit cost | Market unit cost |
|----------------|-----------------------|----------------|------------------|
| Product 1 | 100 | $9 | $11 |
| Product 2 | 200 | $6 | $4 |
| Product 3 | 150 | $3 | $5 |
| Product 4 | 400 | $15 | $14 |
You can assume the adjustment (if any) is relatively small and not related to an unusual or extraordinary circumstance.
1. What is the dollar amount of the adjustment? $ [ ]
2. What is the DEBIT account of the journal entry? [ ]
3. What is the CREDIT account of the journal entry? [ ]
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education