### Inventory Data for Kimzey Medical SupplyThe following table provides detailed information related to the inventories of Kimzey Medical Supply:| | Surgical Equipment | Surgical Supplies | Rehab Equipment | Rehab Supplies ||---------------------------|--------------------|-------------------|-----------------|----------------|| **Selling Price** | $330 | $190 | $410 | $235 || **Cost** | $240 | $160 | $320 | $232 || **Replacement Cost** | $310 | $150 | $305 | $228 || **Costs to Sell** | $58 | $19 | $39 | $38 || **Normal Gross Profit Ratio** | 40% | 40% | 40% | 40% |**Explanation:**- **Selling Price:** The price at which the product is being sold in the market.- **Cost:** The original cost incurred to produce or purchase the inventory.- **Replacement Cost:** The current cost to replace the inventory.- **Costs to Sell:** Additional costs incurred to sell the inventory.- **Normal Gross Profit Ratio:** The typical profit percentage expected over the cost after selling.**Lower of Cost or Market Rule Application:**In applying the lower of cost or market rule, the inventory of rehab supplies would be valued based on the rationale provided by the comparison in terms of the financial elements outlined (such as cost and replacement cost).

Lower of cost or market is an example of accounting conservatism.An asset may not be valued and…

Data related to the inventories of Kimzey Medical Supply are presented below: Surgical Supplies $ 190 160 150 Selling price Cost Surgical Equipment $ 330 240 310 58 40% Rehab Equipment $ 410 320 305 39 40% 19 40% Rehab Supplies $ 235 232 228 38 40% Replacement cost Costs to sell Normal gross profit ratio In applying the lower of cost or market rule, the inventory of rehab supplies would be valued at:

Data related to the inventories of Kimzey Medical Supply are presented below: Surgical Supplies $ 190 160 150 Selling price Cost Surgical Equipment $ 330 240 310 58 40% Rehab Equipment $ 410 320 305 39 40% 19 40% Rehab Supplies $ 235 232 228 38 40% Replacement cost Costs to sell Normal gross profit ratio In applying the lower of cost or market rule, the inventory of rehab supplies would be valued at:

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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