Forest Company has five products in its inventory. Information about ending inventory follows. Product Quantity A 900 B 500 900 600 700 C D E Unit Cost $11 16 4 8 15 Unit Replacement Unit Selling Cost Price $ 17 19 9 7 14 $13 12 3 5 13 The cost to sell for each product consists of a 20 percent sales commission. The normal profit for each product is 30 percent of the selling price. Required: 1. Determine the carrying value of ending inventory, assuming the lower of cost or market (LCM) rule is applied to individual products. 2. Determine the carrying value of inventory, assuming the LCM rule is applied to the entire inventory. 3. Assuming inventory write-downs are common for Forest, record any necessary year-end adjusting entry based on the amount calculated in requirement 2. Required 1 Required 2 Required 3. Complete this question by entering your answers in the tabs below. cuming the lower of cost or market (LCM) rule is applied to individual
Forest Company has five products in its inventory. Information about ending inventory follows. Product Quantity A 900 B 500 900 600 700 C D E Unit Cost $11 16 4 8 15 Unit Replacement Unit Selling Cost Price $ 17 19 9 7 14 $13 12 3 5 13 The cost to sell for each product consists of a 20 percent sales commission. The normal profit for each product is 30 percent of the selling price. Required: 1. Determine the carrying value of ending inventory, assuming the lower of cost or market (LCM) rule is applied to individual products. 2. Determine the carrying value of inventory, assuming the LCM rule is applied to the entire inventory. 3. Assuming inventory write-downs are common for Forest, record any necessary year-end adjusting entry based on the amount calculated in requirement 2. Required 1 Required 2 Required 3. Complete this question by entering your answers in the tabs below. cuming the lower of cost or market (LCM) rule is applied to individual
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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1
Transcribed Image Text:Forest Company has five products in its inventory. Information about ending inventory follows.
Unit Replacement Unit Selling
Cost
Price
$ 17
19
Product Quantity
A
900
500
900
600
700
ABCDE
Unit Cost
$11
16485
$13
12
3
5
13
9
7
14
The cost to sell for each product consists of a 20 percent sales commission. The normal profit for each product is 30 percent of the
selling price.
Required:
1. Determine the carrying value of ending inventory, assuming the lower of cost or market (LCM) rule is applied to individual
products.
2. Determine the carrying value of inventory, assuming the LCM rule is applied to the entire inventory.
3. Assuming inventory write-downs are common for Forest, record any necessary year-end adjusting entry based on the amount
calculated in requirement 2.
Complete this question by entering your answers in the tabs below.
Required 1 Required 2 Required 3
Determine the carrying value of ending inventory, assuming the lower of cost or market (LCM) rule is applied to individual
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