temUnitsCostMarketCar audio equipment Speakers335$90 $98 Stereos250 111 100 Amplifiers316 86 95 Subwoofers194 52 41 Security equipment Alarms470 150 125 Locks281 93 84 Cameras202 310 322 Binocular equipment Tripods175 70 84 Stabilizers160 97 105 Required:1. Calculate the lower of cost or market for the inventory applied separately to each item.2. If the market amount is less than the recorded cost of the inventory, then record the LCM adjustment to the Merchandise Inventory account.

These are the accounting transactions that are having a monetary impact on the financial statement…

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Business

Accounting

equire

Financial & Managerial Accounting

13th Edition

ISBN:9781285866307

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter6: Inventories

Section: Chapter Questions

Problem 7DQ: Using the following data, how should the inventory be valued under lower of cost or market? Original...

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Question

tem	Units	Cost	Market
Car audio equipment
Speakers	335	$	90	$	98
Stereos	250		111		100
Amplifiers	316		86		95
Subwoofers	194		52		41
Security equipment
Alarms	470		150		125
Locks	281		93		84
Cameras	202		310		322
Binocular equipment
Tripods	175		70		84
Stabilizers	160		97		105

Required:
1. Calculate the lower of cost or market for the inventory applied separately to each item.
2. If the market amount is less than the recorded cost of the inventory, then record the LCM adjustment to the Merchandise Inventory account.

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