The products of ABC can be grouped into two major categories: products A1 and A2 are in Category A, while products B1 and B2 are in category B. Assume the following information regarding ABC's inventories for year 2021: Product A1TransactionNumber of UnitsUnit CostUnit PriceBeginning inventory400€5 Purchase No. 1400€5 Sale No.1600 €10Sale No.2100 €12Purchase No. 21,000€7 Sale No.3700 €10Purchase No. 31,000€7 Sale No.4600 €15Sale No.5600 €15Purchase No. 41,200€9 Selling price as at December 31, 2021 €14 Product A2TransactionBeginning inventoryNumber of Units500Unit Cost€8Unit PriceSale No.1400 €12Purchase No. 1600€8 Purchase No. 2500€7 Sale No.2650 €12Purchase No. 3150€9 Purchase No. 4200€8 Selling priceas at December 31, €112021 Product Β1 TransactionNumber of UnitsUnit CostUnit PriceBeginning inventory600€20 Purchase No. 1400€20 Sale No.1500 €30Sale No.2100 €30Purchase No. 2300€24 Purchase No. 3400€23 Sale No.3500 €32Purchase No. 4300€22 Selling priceas at December 31, €222021 Product Β2 Transaction Number of Units Beginning inventory 100Unit Cost€40Unit PricePurchaseNo. 1 200€38 Purchase No. 2 300€38 Sale No.1 500Purchase No. 3 400 €36€60Sale No.2 350 €60Purchase No. 4 500€34 Sale No.3 200 €58Sale No.4 150 €58Purchase No. 5 200€36 Selling priceas at December 31, €142021 ABC employs the weighted-average cost method.Sales commissionsand transportationcosts average 10 % of selling price. Required:Determine the amount of ending inventory and prepare the year-end adjusting entry to write-down inventory (if necessary), assuming that ABC applies the lower of cost to net realizable method to the following:Individual itemMajor categoriesTotal inventoryAdditional information: no inventory write-down has been recognized in previous reporting periods.

Name: The products of ABC can be grouped into two major categories: products
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Description: The products of ABC can be grouped into two major categories: products A1 and A2 are in Category A, while products B1 and B2 are in category B. Assume the following information regarding ABC's inventories for year 2021: Product A1TransactionNumber of

Product A1: Purchases Sales Balance Particulars Units Unit price Amount Units Unit…

Answered: Determine the amount of ending…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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The products of ABC can be grouped into two major categories: products A1 and A2 are in Category A, while products B1 and B2 are in category B. Assume the following information regarding ABC's inventories for year 2021:

Product A1

Transaction	Number of Units	Unit Cost	Unit Price
Beginning inventory	400	€5
Purchase No. 1	400	€5
Sale No.1	600		€10
Sale No.2	100		€12
Purchase No. 2	1,000	€7
Sale No.3	700		€10
Purchase No. 3	1,000	€7
Sale No.4	600		€15
Sale No.5	600		€15
Purchase No. 4	1,200	€9
Selling price as at December 31, 2021			€14

Product A2

Transaction Beginning inventory	Number of Units 500	Unit Cost €8	Unit Price
Sale No.1	400		€12
Purchase No. 1	600	€8
Purchase No. 2	500	€7
Sale No.2	650		€12
Purchase No. 3	150	€9
Purchase No. 4	200	€8
Selling priceas at December 31,			€11
2021

Product Β1
Transaction	Number of Units	Unit Cost	Unit Price
Beginning inventory	600	€20
Purchase No. 1	400	€20
Sale No.1	500		€30
Sale No.2	100		€30
Purchase No. 2	300	€24
Purchase No. 3	400	€23
Sale No.3	500		€32
Purchase No. 4	300	€22
Selling priceas at December 31,			€22
2021
Product Β2
Transaction Number of Units Beginning inventory 100	Unit Cost €40	Unit Price
PurchaseNo. 1 200	€38
Purchase No. 2 300	€38
Sale No.1 500 Purchase No. 3 400	€36	€60
Sale No.2 350		€60
Purchase No. 4 500	€34
Sale No.3 200		€58
Sale No.4 150		€58
Purchase No. 5 200	€36
Selling priceas at December 31,		€14
2021
ABC employs the weighted-average cost method.	Sales commissions	and transportation
costs average 10 % of selling price.

Required:

Determine the amount of ending inventory and prepare the year-end adjusting entry to write-down inventory (if necessary), assuming that ABC applies the lower of cost to net realizable method to the following:

Individual item
Major categories
Total inventory

Additional information: no inventory write-down has been recognized in previous reporting periods.

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Determine the amount of ending inventory and prepare the year-end adjusting entry to write-down inventory (if necessary), assuming that ABC applies the lower of cost to net realizable method to the following: Individual item Major categories Total inventory