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(a1) Determine the write-down, if any, to reduce inventory to market at May 31, 2025 inventory loss 5

(a1) Determine the write-down, if any, to reduce inventory to market at May 31, 2025 inventory loss 5

FINANCIAL ACCOUNTING
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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(a2) For the fiscal year ended May 31, 2025, prepare the entry to record the decline in inventory to market, if any, using the loss method. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts) Date Account Titles and Explanation May 31 Debit Credit
Transcribed Image Text:(a2) For the fiscal year ended May 31, 2025, prepare the entry to record the decline in inventory to market, if any, using the loss method. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts) Date Account Titles and Explanation May 31 Debit Credit
Sweet Home Improvement Company installs replacement siding, windows, and louvered glass doors for single-family homes and condominium complexes. The company is in the process of preparing its annual financial statements for the fiscal year ende tay 31, 2025.Jim Alcide, controller for Sweet, has gathered the following data concerning inventory. At May 31,2025, the balance in Sweet's Raw Materials Inventory account was $481,440. Alcide summarized the relevant inventory cost and market data at May 31, 2025, in the schedule below. Alcide assigned Patricia Devereaux an intern from a local college, the task of calculating the amount that should appear on Sweet's May 31, 2025, financial statements for inventory under the lower-of-cost or market rule as applied to each item in inventory. Devereaux expressed concern over departing from the historical cost principle. Consider the following expanded data at May 31. 2025, Assume Sweet uses LIFO inventory costing Aluminum siding Cedar shake siding Louvered glass doors Thermal windows Total Cost $82,600 101,480 132,160 Inventory loss $ 165.200 $481,440 Replacement Cost $73,750 93,692 146.320 148.680 $462,442 Sales Price $75,520 110,920 219,952 182.664 $589,056 Net Realizable Value $66,080 100,064 198,594 165,200 $529,938 (a1) Determine the write-down, if any, to reduce inventory to market at May 31, 2025 Normal Profit $6.018 8.732 21.830 18.172 $54,752
Transcribed Image Text:Sweet Home Improvement Company installs replacement siding, windows, and louvered glass doors for single-family homes and condominium complexes. The company is in the process of preparing its annual financial statements for the fiscal year ende tay 31, 2025.Jim Alcide, controller for Sweet, has gathered the following data concerning inventory. At May 31,2025, the balance in Sweet's Raw Materials Inventory account was $481,440. Alcide summarized the relevant inventory cost and market data at May 31, 2025, in the schedule below. Alcide assigned Patricia Devereaux an intern from a local college, the task of calculating the amount that should appear on Sweet's May 31, 2025, financial statements for inventory under the lower-of-cost or market rule as applied to each item in inventory. Devereaux expressed concern over departing from the historical cost principle. Consider the following expanded data at May 31. 2025, Assume Sweet uses LIFO inventory costing Aluminum siding Cedar shake siding Louvered glass doors Thermal windows Total Cost $82,600 101,480 132,160 Inventory loss $ 165.200 $481,440 Replacement Cost $73,750 93,692 146.320 148.680 $462,442 Sales Price $75,520 110,920 219,952 182.664 $589,056 Net Realizable Value $66,080 100,064 198,594 165,200 $529,938 (a1) Determine the write-down, if any, to reduce inventory to market at May 31, 2025 Normal Profit $6.018 8.732 21.830 18.172 $54,752
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