Company Z had the following information: inventory at cost of $5,100, selling value of inventory of $5,250, inventory cost of completion of $1C inventory cost of distribution of $150, normal profit margin of $2,000, and inventory replacement cost of $4,800. What is the floor amount to b used in the determination of the inventory's market value in the lower-of- cost-or-market method of inventory?

Company Z had the following information: inventory at cost of $5,100, selling value of inventory of $5,250, inventory cost of completion of $1C inventory cost of distribution of $150, normal profit margin of $2,000, and inventory replacement cost of $4,800. What is the floor amount to b used in the determination of the inventory's market value in the lower-of- cost-or-market method of inventory?

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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Lower-of-Cost-or-Market Inventory 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 9. InventoryItem InventoryQuantity Cost perUnit Market Value per Unit(Net Realizable Value) Birch 40 $99 $106 Cypress 23 112 124 Mountain Ash 33 202 208 Spruce 18 114 102 Willow 20 146 151 Inventory at the Lower of Cost or Market Inventory Item Total Cost Total Market Total Lower of C or M Birch $ $ $ Cypress Mountain Ash Spruce Willow Total $ $ $
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1. Compute the cost of the ending inventory under the FIFO method. Round the cost-to-retail ratio to three decimal places and the final answers to the nearest dollar.
Lower-of-Cost-or-Market Method On the basis of the data shown below: Item InventoryQuantity Cost perUnit Market Value per Unit(Net Realizable Value) A13Y 152 $49 $52 O5T4 290 25 22 Determine the value of the inventory at the lower of cost or market by applying lower of cost or market to each inventory item, as shown in Exhibit 9. $
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Explain in 175 words: Explain how the inventory valuation method (LIFO or FIFO) chosen by a company affects the cost of goods sold and net income if prices are rising. What if the prices are declining?
Lower-of-Cost-or-Market InventoryOn 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 9. ProductInventoryQuantityUnitCost PriceUnitMarket Value per Unit(Net Realizable Value)Model A300$140$125Model B50090112Model C1506059Model D800120115Model E400140145 Inventory at the Lower of Cost or MarketProductTotal CostTotal MarketLower of Total Cost or Total MarketA$$$B C D E Total$$$
Pina Furniture Ltd. uses a perpetual inventory system and has a beginning inventory, as at June 1, of 490 bookcases at a cost of $132 each. During June, the company had the following purchases and sales of bookcases: Date June (a) 6 10 14 16 26 Purchases Units Unit cost 1,160 $134 1,780 970 135 136 Sales Units Unit price 950 1,660 $201 206
Lower-of-Cost-or-Market Inventory 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 9. InventoryItem InventoryQuantity Cost perUnit Market Value per Unit(Net Realizable Value) Birch 100 $125 $120 Cypress 75 100 108 Mountain Ash 80 90 86 Spruce 130 74 80 Willow 60 105 98 Inventory at the Lower of Cost or Market InventoryItem Total Cost Total Market Total Lower of C or M Birch $fill in the blank 1 $fill in the blank 2 $fill in the blank 3 Cypress fill in the blank 4 fill in the blank 5 fill in the blank 6 Mountain Ash fill in the blank 7 fill in the blank 8 fill in the blank 9 Spruce fill in the blank 10 fill in the blank 11 fill in the blank 12 Willow fill in the blank 13 fill in the blank 14 fill in the blank 15 Total $fill in the blank 16 $fill in the blank 17 $fill in the blank 18
Lower-of-Cost-or-Market Inventory On the basis of the following data, determine the value of the inventory at the lower of cost or market. Total Product Inventory Quantity Cost per Unit Market Value perUnit (Net Realizable Value) Cost Market LCM Adams 22 $51 $58 $ $ $ Coolidge 23 224 237 McKinley 27 167 152 Garfield 32 58 49 Lincoln 35 263 270 Total $ $ $
Refer to the data in attached image. 1.Using the perpetual inventory system, compute the cost of ending inventory, cost of goods sold, and gross margin. Use the average-cost, FIFO, and LIFO inventory costing methods. (Round unit costs to the nearest cent.) 2.Explain the reasons for the differences in gross mar-gin produced by the three methods.