Exercise 9-6 (Algo) Lower of cost or market [LO9-1] Tatum Company has four products in its inventory. Information about ending inventory is as follows: Total Replacement Product Total Cost 101 102 $ 122,000 Cost $ 111,800 Total Net Realizable Value $ 101,600 91,400 86,300 111,700 103 60,900 104 30,500 40,600 28,500 50,800 50,900 The normal profit is 30% of total cost. Required: 1. Determine the carrying value of inventory assuming the lower of cost or market (LCM) rule is applied to individual products. 2. Assuming that inventory write-downs are common for Tatum Company, record any necessary year-end adjusting entry. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Determine the carrying value of inventory assuming the lower of cost or market (LCM) rule is applied to individual products. Product Total Cost Replacement cost NRV NRV minus NP Market Inventory Value 101 $ 122,000 $ 111,800 $ 101,600 102 91,400 86,300 111,700 103 60,900 40,600 50,800 104 30,500 28,500 50,900 Totals $ 304,800 < Required 1 Required 2 >
Exercise 9-6 (Algo) Lower of cost or market [LO9-1] Tatum Company has four products in its inventory. Information about ending inventory is as follows: Total Replacement Product Total Cost 101 102 $ 122,000 Cost $ 111,800 Total Net Realizable Value $ 101,600 91,400 86,300 111,700 103 60,900 104 30,500 40,600 28,500 50,800 50,900 The normal profit is 30% of total cost. Required: 1. Determine the carrying value of inventory assuming the lower of cost or market (LCM) rule is applied to individual products. 2. Assuming that inventory write-downs are common for Tatum Company, record any necessary year-end adjusting entry. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Determine the carrying value of inventory assuming the lower of cost or market (LCM) rule is applied to individual products. Product Total Cost Replacement cost NRV NRV minus NP Market Inventory Value 101 $ 122,000 $ 111,800 $ 101,600 102 91,400 86,300 111,700 103 60,900 40,600 50,800 104 30,500 28,500 50,900 Totals $ 304,800 < Required 1 Required 2 >
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Vishnu
![Exercise 9-6 (Algo) Lower of cost or market [LO9-1]
Tatum Company has four products in its inventory. Information about ending inventory is as follows:
Total Replacement
Product
Total Cost
101
102
$ 122,000
Cost
$ 111,800
Total Net
Realizable Value
$ 101,600
91,400
86,300
111,700
103
60,900
104
30,500
40,600
28,500
50,800
50,900
The normal profit is 30% of total cost.
Required:
1. Determine the carrying value of inventory assuming the lower of cost or market (LCM) rule is applied to individual products.
2. Assuming that inventory write-downs are common for Tatum Company, record any necessary year-end adjusting entry.
Complete this question by entering your answers in the tabs below.
Required 1
Required 2
Determine the carrying value of inventory assuming the lower of cost or market (LCM) rule is applied to individual products.
Product
Total Cost
Replacement
cost
NRV
NRV minus NP
Market
Inventory Value
101
$
122,000 $
111,800 $
101,600
102
91,400
86,300
111,700
103
60,900
40,600
50,800
104
30,500
28,500
50,900
Totals
$
304,800
< Required 1
Required 2 >](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fc922ea8c-759f-475f-91ef-8da1a3cebdb0%2Fd9daef9f-8e91-443f-ab29-f1344263e206%2Fo2x0owr_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Exercise 9-6 (Algo) Lower of cost or market [LO9-1]
Tatum Company has four products in its inventory. Information about ending inventory is as follows:
Total Replacement
Product
Total Cost
101
102
$ 122,000
Cost
$ 111,800
Total Net
Realizable Value
$ 101,600
91,400
86,300
111,700
103
60,900
104
30,500
40,600
28,500
50,800
50,900
The normal profit is 30% of total cost.
Required:
1. Determine the carrying value of inventory assuming the lower of cost or market (LCM) rule is applied to individual products.
2. Assuming that inventory write-downs are common for Tatum Company, record any necessary year-end adjusting entry.
Complete this question by entering your answers in the tabs below.
Required 1
Required 2
Determine the carrying value of inventory assuming the lower of cost or market (LCM) rule is applied to individual products.
Product
Total Cost
Replacement
cost
NRV
NRV minus NP
Market
Inventory Value
101
$
122,000 $
111,800 $
101,600
102
91,400
86,300
111,700
103
60,900
40,600
50,800
104
30,500
28,500
50,900
Totals
$
304,800
< Required 1
Required 2 >
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