Forester Company has five products in its inventory. Information about the December 31, 2021, inventory follows. Unit Selling Price Product A B E Quantity 1,000 700 900 600 900 Product (units) Unit Cost $ 22 A (1000) B (700) 27 15 19 26 C (900) D (600) E (900) Unit Replacement Cost $ The cost to sell for each product consists of a 10 percent sales commission. The normal profit for each product is 30 percent of the selling price. RC 24 23 14 16 24 Required: 1. Determine the carrying value of inventory at December 31, 2021, assuming the lower of cost or market (LCM) rule is applied to individual products. 2. Determine the carrying value of inventory at December 31, 2021, assuming the LCM rule is applied to the entire inventory. 3. Assuming inventory write-downs are common for Forester, 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 inventory at December 31, 2021, assuming the lower of cost or market (LCM) rule is applied to individual products. (Do not round intermediate calculations.) NRV 28 30 20 18 25 NRV-NP Total < Required 1 $ Market 0 $ Cost Required 2 > Inventory carrying value 0 $ 0
Forester Company has five products in its inventory. Information about the December 31, 2021, inventory follows. Unit Selling Price Product A B E Quantity 1,000 700 900 600 900 Product (units) Unit Cost $ 22 A (1000) B (700) 27 15 19 26 C (900) D (600) E (900) Unit Replacement Cost $ The cost to sell for each product consists of a 10 percent sales commission. The normal profit for each product is 30 percent of the selling price. RC 24 23 14 16 24 Required: 1. Determine the carrying value of inventory at December 31, 2021, assuming the lower of cost or market (LCM) rule is applied to individual products. 2. Determine the carrying value of inventory at December 31, 2021, assuming the LCM rule is applied to the entire inventory. 3. Assuming inventory write-downs are common for Forester, 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 inventory at December 31, 2021, assuming the lower of cost or market (LCM) rule is applied to individual products. (Do not round intermediate calculations.) NRV 28 30 20 18 25 NRV-NP Total < Required 1 $ Market 0 $ Cost Required 2 > Inventory carrying value 0 $ 0
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Forester Company has five products in its inventory. Information about the December 31, 2021, inventory follows.
Unit
Selling
Price
Product
A
B
E
Quantity
1,000
700
900
600
900
Product
(units)
Unit
Cost
$ 22
A (1000)
B (700)
27
15
19
26
C (900)
D (600)
E (900)
Unit
Replacement
Cost
$
The cost to sell for each product consists of a 10 percent sales commission. The normal profit for each product is 30 percent of the
selling price.
RC
24
23
14
16
24
Required:
1. Determine the carrying value of inventory at December 31, 2021, assuming the lower of cost or market (LCM) rule is applied to
individual products.
2. Determine the carrying value of inventory at December 31, 2021, assuming the LCM rule is applied to the entire inventory.
3. Assuming inventory write-downs are common for Forester, 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 inventory at December 31, 2021, assuming the lower of cost or market (LCM) rule is applied
to individual products. (Do not round intermediate calculations.)
NRV
28
30
20
18
25
NRV-NP
Total
< Required 1
$
Market
0 $
Cost
Required 2
>
Inventory
carrying
value
0 $
0
Transcribed Image Text:Complete this question by entering your answers in the tabs below.
Required 1 Required 2 Required 3
Determine the carrying value of inventory at December 31, 2021, assuming the LCM rule is applied to the entire inventory.
(Do not round intermediate calculations.)
Inventory carrying value
< Required 1
Required 3 >
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