E7-11 Reporting Inventory at Lower of Cost or Market [LO 7-4] Sandals Company is preparing the annual financial statements dated December 31. Ending inventory information about the four major items stocked for regular sale follows: Market Unit Cost When Product Line on Hand Acquire(FIFO) $ 17 Value Quantity at Year- End $ 19 Air Flow 40 Blister 100 30 28 Buster Coolonite 30 80 75 Dudesly 35 20 25
E7-11 Reporting Inventory at Lower of Cost or Market [LO 7-4] Sandals Company is preparing the annual financial statements dated December 31. Ending inventory information about the four major items stocked for regular sale follows: Market Unit Cost When Product Line on Hand Acquire(FIFO) $ 17 Value Quantity at Year- End $ 19 Air Flow 40 Blister 100 30 28 Buster Coolonite 30 80 75 Dudesly 35 20 25
Chapter1: Financial Statements And Business Decisions
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![E7-11 Reporting Inventory at Lower of Cost or Market [LO 7-4]
Sandals Company is preparing the annual financial statements dated December 31.
Ending inventory information about the four major items stocked for regular sale follows:
Market
Unit Cost
Value
Quantity
Product Line on Hand Acquire(FIFO)
When
at Year-
End
Air Flow
40
$ 17
$ 19
Blister
100
30
28
Buster
Coolonite
30
80
75
Dudesly
35
20
25
Required:
1. Compute the amount that should be reported for the ending inventory using the LCM
rule applied to each item.
Ending Inventory
2. How will the write-down of inventory to lower of cost or market affect the company's
expenses reported for the year ended December 31?
Cost of goods sold will be increased
by](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fd7f57acd-42b9-466e-a85d-4609f38f005a%2F9560e48b-5191-4579-bdd4-1c4bc3300b2f%2F40d4j9n_processed.png&w=3840&q=75)
Transcribed Image Text:E7-11 Reporting Inventory at Lower of Cost or Market [LO 7-4]
Sandals Company is preparing the annual financial statements dated December 31.
Ending inventory information about the four major items stocked for regular sale follows:
Market
Unit Cost
Value
Quantity
Product Line on Hand Acquire(FIFO)
When
at Year-
End
Air Flow
40
$ 17
$ 19
Blister
100
30
28
Buster
Coolonite
30
80
75
Dudesly
35
20
25
Required:
1. Compute the amount that should be reported for the ending inventory using the LCM
rule applied to each item.
Ending Inventory
2. How will the write-down of inventory to lower of cost or market affect the company's
expenses reported for the year ended December 31?
Cost of goods sold will be increased
by
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