Blossom 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 ended May 31, 2025. Jim Alcide, controller for Blossom, has gathered the following data concerning inventory. At May 31, 2025, the balance in Blossom's Raw Materials Inventory account was $444,720. 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 Blossom'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 Blossom uses LIFO inventory costing. Aluminum siding Cedar shake siding Louvered glass doors Thermal windows Total Cost $76,300 93,740 122,080 152,600 $444,720 Replacement Cost $68,125 86,546 135,160 137,340 $427,171 Sales Price $69,760 102,460 203,176 168,732 $544,128 Net Realizable Value $61,040 92,432 183,447 152,600 $489,519 (a1) Determine the write-down, if any, to reduce inventory to market at May 31, 2025. Normal Profit $5,559 8,066 20,165 16,786 $50,576
Blossom 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 ended May 31, 2025. Jim Alcide, controller for Blossom, has gathered the following data concerning inventory. At May 31, 2025, the balance in Blossom's Raw Materials Inventory account was $444,720. 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 Blossom'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 Blossom uses LIFO inventory costing. Aluminum siding Cedar shake siding Louvered glass doors Thermal windows Total Cost $76,300 93,740 122,080 152,600 $444,720 Replacement Cost $68,125 86,546 135,160 137,340 $427,171 Sales Price $69,760 102,460 203,176 168,732 $544,128 Net Realizable Value $61,040 92,432 183,447 152,600 $489,519 (a1) Determine the write-down, if any, to reduce inventory to market at May 31, 2025. Normal Profit $5,559 8,066 20,165 16,786 $50,576
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Blossom 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 ended May 31,
2025. Jim Alcide, controller for Blossom, has gathered the following data concerning inventory.
At May 31, 2025, the balance in Blossom's Raw Materials Inventory account was $444,720. 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 Blossom'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 Blossom uses LIFO inventory costing.
Aluminum siding
Cedar shake siding
Louvered glass doors.
Thermal windows
Total
Inventory loss
Cost
$
$76,300
93,740
122,080
152,600
$444,720
Replacement
Cost
$68,125
86,546
135,160
137,340
$427,171
Sales Price
$69,760
102,460
203,176
168,732
$544,128
Net Realizable
Value
$61,040
92,432
183,447
152,600
(a1) Determine the write-down, if any, to reduce inventory to market at May 31, 2025.
$489,519
Normal Profit
$5,559
8,066
20,165
16,786
$50,576
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