Forest Company has five products in its Inventory. Information about ending inventory follows. Unit Replacement Product Quantity Unit Cost 21 Unit selling Price 27 13 15 19 17 TTTTT 14 The cost to sell for each product consists of a 20 percent sales commission. The normal profit for each product is 40 percent of the selling price.
Forest Company has five products in its Inventory. Information about ending inventory follows. Unit Replacement Product Quantity Unit Cost 21 Unit selling Price 27 13 15 19 17 TTTTT 14 The cost to sell for each product consists of a 20 percent sales commission. The normal profit for each product is 40 percent of the selling price.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Forest Company has five products in its Inventory. Information about ending inventory follows.
Product
A
Quantity
700
Unit Cost
Unit Replacement
Cost
$ 21
$ 23
B
1,000
26
22
с
900
14
13
D
600
E
500
18
25
15
23
Unit selling
Price
$ 27
29
19
17
24
The cost to sell for each product consists of a 20 percent sales commission. The normal profit for each product is 40 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
products.
Note: Do not round intermediate calculations.
Product
(units)
A(700)
B (1,000)
C (900)
D (600)
E(500)
RC
NRV
NRV minus NP
Market
Cost
Inventory
value
Total
< Required 1
S
0 S
Required 2 >
0
$
0
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