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Garcia Home Improvement Company installs replacement siding, windows, and louvered glass doors for single-family homes and condominium complexes. The company is in the process of preparing its annual financial statements for the fiscal year ended May 31, 2025. Jim Alcide, controller for Garcia, has gathered the following data concerning inventory. At May 31, 2025, the balance in Garcia's Raw Materials Inventory account was $408,000. Alcide summarized the relevant inventory cost and market data at May 31, 2025, in the schedule below. Alcide assigned Patricia Devereaux, an intern from a local college, the task of calculating the amount that should appear on Garcia's May 31, 2025, financial statements for inventory under the LCNRV rule as applied to each item in inventory. Devereaux expressed concern over departing from the historical cost principle. Aluminum siding Cedar shake siding Louvered glass doors Thermal windows Total (a) Inventory loss Determine the inventory write-down, if any, at May 31, 2025. tA Cost $70,000 86,000 112,000 140,000 $408,000 $499,200 Sales Price Net Realizable Value $64,000 $56,000 94,000 84,800 186,400 168,300 154,800 140,000 $449,100 $

Garcia Home Improvement Company installs replacement siding, windows, and louvered glass doors for single-family homes and condominium complexes. The company is in the process of preparing its annual financial statements for the fiscal year ended May 31, 2025. Jim Alcide, controller for Garcia, has gathered the following data concerning inventory. At May 31, 2025, the balance in Garcia's Raw Materials Inventory account was $408,000. Alcide summarized the relevant inventory cost and market data at May 31, 2025, in the schedule below. Alcide assigned Patricia Devereaux, an intern from a local college, the task of calculating the amount that should appear on Garcia's May 31, 2025, financial statements for inventory under the LCNRV rule as applied to each item in inventory. Devereaux expressed concern over departing from the historical cost principle. Aluminum siding Cedar shake siding Louvered glass doors Thermal windows Total (a) Inventory loss Determine the inventory write-down, if any, at May 31, 2025. tA Cost $70,000 86,000 112,000 140,000 $408,000 $499,200 Sales Price Net Realizable Value $64,000 $56,000 94,000 84,800 186,400 168,300 154,800 140,000 $449,100 $

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Garcia Home Improvement Company installs replacement siding, windows, and louvered glass doors for single-family homes and condominium complexes. The company is in the process of preparing its annual financial statements for the fiscal year ended May 31, 2025. Jim Alcide, controller for Garcia, has gathered the following data concerning inventory. At May 31, 2025, the balance in Garcia's Raw Materials Inventory account was $408,000. Alcide summarized the relevant inventory cost and market data at May 31, 2025, in the schedule below. Alcide assigned Patricia Devereaux, an intern from a local college, the task of calculating the amount that should appear on Garcia's May 31, 2025, financial statements for inventory under the LCNRV rule as applied to each item in inventory. Devereaux expressed concern over departing from the historical cost principle. Aluminum siding Cedar shake siding Louvered glass doors Thermal windows Total (a) Inventory loss $ Cost $70,000 86,000 112,000 EA 140,000 Sales Price Net Realizable Value $64,000 $56,000 84,800 168,300 140,000 $449,100 94,000 186,400 154,800 Determine the inventory write-down, if any, at May 31, 2025. $408,000 $499,200
Transcribed Image Text:Garcia Home Improvement Company installs replacement siding, windows, and louvered glass doors for single-family homes and condominium complexes. The company is in the process of preparing its annual financial statements for the fiscal year ended May 31, 2025. Jim Alcide, controller for Garcia, has gathered the following data concerning inventory. At May 31, 2025, the balance in Garcia's Raw Materials Inventory account was $408,000. Alcide summarized the relevant inventory cost and market data at May 31, 2025, in the schedule below. Alcide assigned Patricia Devereaux, an intern from a local college, the task of calculating the amount that should appear on Garcia's May 31, 2025, financial statements for inventory under the LCNRV rule as applied to each item in inventory. Devereaux expressed concern over departing from the historical cost principle. Aluminum siding Cedar shake siding Louvered glass doors Thermal windows Total (a) Inventory loss $ Cost $70,000 86,000 112,000 EA 140,000 Sales Price Net Realizable Value $64,000 $56,000 84,800 168,300 140,000 $449,100 94,000 186,400 154,800 Determine the inventory write-down, if any, at May 31, 2025. $408,000 $499,200
(b) For the fiscal year ended May 31, 2025, prepare the entry to record the inventory write-down, if any, using the loss method. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts.) Date Account Titles and Explanation May 31 Debit Credit
Transcribed Image Text:(b) For the fiscal year ended May 31, 2025, prepare the entry to record the inventory write-down, if any, using the loss method. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts.) Date Account Titles and Explanation May 31 Debit Credit
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