a. Determine the value of the inventory at the lower of cost or market applied to each item in the inventory. Inventory at the Lower of Cost or Market Product Inventory Quantity Cost per Unit Market Value per Unit (Net Realizable Value) Cost Market Lower of Cost or Market Model A Model A $Model A $Model A $Model A $Model A $Model A Model B Model B Model B Model B Model B Model B Model B Model C Model C Model C Model C Model C Model C Model C Model D Model D Model D Model D Model D Model D Model D Model E Model E Model E Model E Model E Model E Model E Total blank blank blank $Total $Total $Total
a. Determine the value of the inventory at the lower of cost or market applied to each item in the inventory. Inventory at the Lower of Cost or Market Product Inventory Quantity Cost per Unit Market Value per Unit (Net Realizable Value) Cost Market Lower of Cost or Market Model A Model A $Model A $Model A $Model A $Model A $Model A Model B Model B Model B Model B Model B Model B Model B Model C Model C Model C Model C Model C Model C Model C Model D Model D Model D Model D Model D Model D Model D Model E Model E Model E Model E Model E Model E Model E Total blank blank blank $Total $Total $Total
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
On the basis of the following data, determine the value of the inventory at the lower of cost or market. Assemble the data in the form illustrated in Exhibit 10.
| Product | Inventory Quantity |
Cost Per Unit |
Market Value per Unit (Net Realizable Value) |
|---|---|---|---|
| Class 1: | |||
| Model A | 25 | $113 | $127 |
| Model B | 13 | 274 | 289 |
| Model C | 17 | 217 | 195 |
| Class 2: | |||
| Model D | 31 | 70 | 59 |
| Model E | 39 | 61 | 45 |
Question Content Area
a. Determine the value of the inventory at the lower of cost or market applied to each item in the inventory.
Product |
Inventory Quantity |
Cost per Unit |
Market Value per Unit (Net Realizable Value) |
Cost |
Market |
Lower of Cost or Market |
|---|---|---|---|---|---|---|
| Model A | Model A | $Model A | $Model A | $Model A | $Model A | $Model A |
| Model B | Model B | Model B | Model B | Model B | Model B | Model B |
| Model C | Model C | Model C | Model C | Model C | Model C | Model C |
| Model D | Model D | Model D | Model D | Model D | Model D | Model D |
| Model E | Model E | Model E | Model E | Model E | Model E | Model E |
| Total | blank | blank | blank | $Total | $Total | $Total |
Question Content Area
b. Determine the value of the inventory at the lower of cost or market applied to each class of inventory.
Product |
Inventory Quantity |
Cost per Unit |
Market Value per Unit (Net Realizable Value) |
Cost |
Market |
Lower of Cost or Market |
|---|---|---|---|---|---|---|
| Class 1: | blank | blank | blank | blank | blank | blank |
| Model A | Model A | $Model A | $Model A | $Model A | $Model A | blank |
| Model B | Model B | Model B | Model B | Model B | Model B | blank |
| Model C | Model C | Model C | Model C | Model C | Model C | blank |
| Subtotal | blank | blank | blank | $Subtotal | $Subtotal | $Subtotal |
| Class 2: | blank | blank | blank | blank | blank | blank |
| Model D | Model D | Model D | Model D | $Model D | $Model D | blank |
| Model E | Model E | Model E | Model E | Model E | Model E | blank |
| Subtotal | blank | blank | blank | $Subtotal | $Subtotal | Subtotal |
| Total | blank | blank | blank | $Total | $Total | $Total |
Question Content Area
c. Determine the value of the inventory at the lower of cost or market applied to total inventory.
Product |
Inventory Quantity |
Cost per Unit |
Market Value per Unit (Net Realizable Value) |
Cost |
Market |
Lower of Cost or Market |
|---|---|---|---|---|---|---|
| Model A | Model A | $Model A | $Model A | $Model A | $Model A | blank |
| Model B | Model B | Model B | Model B | Model B | Model B | blank |
| Model C | Model C | Model C | Model C | Model C | Model C | blank |
| Model D | Model D | Model D | Model D | Model D | Model D | blank |
| Model E | Model E | Model E | Model E | Model E | Model E | blank |
| Total | blank | blank | blank | $Total | $Total | $Total |
Expert Solution
Step 1
a. Inventory at the Lower of Cost or Market
| Product | Inventory Quality | Cost Per unit in dollars ($) | Market Value per unit (net realisable value)in dollars ($) | Cost in dollars ($) | Market in dollars ($) | Lower of cost or market in dollars ($) |
| Model A | 25 | 113 | 127 | 2,825 | 3,175 | 2,825 |
| Model B | 13 | 274 | 289 | 3,562 | 3,757 | 3,562 |
| Model C | 17 | 217 | 195 | 3,689 | 3,315 | 3,315 |
| Model D | 31 | 70 | 59 | 2,170 | 1,829 | 2,170 |
| Model E | 39 | 61 | 45 | 2,379 | 1,755 | 1,755 |
| Total | $ 14,625 |
$ 13,831 |
$13,627 |
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