Home Stop sells two product categories, furniture and accessories. Information pertaining to its 2021 year-end inventory is as follows:   Inventory,                                                                                            Per Unit By Product Category                                        Quantity                Cost                     Market Furniture: Chairs                                                                       40                      $40                        $   46 Desks                                                                       20                         88                              73 Tables                                                                      60                         99                            107 Accessories:  Rugs                                                                        30                         75                               63  Lamps                                                                     60                         37                               33     Required: 1.Determine the carrying value of inventory at year-end, assuming the lower of cost or market (LCM) rule is applied to (a) individual products, (b) product categories, and (c) total inventory. 2.Assuming inventory write-downs are common for Home Stop, record any necessary year-end adjustment amount for each of the LCM applications in requirement 1.   Complete this question by entering your answers in the tabs below.   Required 1:                                                                                                                                  Lower of cost or market Product                           Cost                   Market        By Individual       By Product          By Total                                                                                             Products             Categories         Inventory Furniture:   Chairs                              ______              _______        _________   Desks                              _______            ________      _________   Tables                             _______            ________      _________   Total Furniture Accessories:    Rugs                                ______            ________       _________    Lamps                            _______          _________      _________      Total accessories   Total                                  _______         _________     __________     Required 2.   Individual products ____________ Product categories ____________ Total inventory _______________

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Home Stop sells two product categories, furniture and accessories. Information pertaining to its 2021 year-end inventory is as follows:

 

Inventory,                                                                                            Per Unit

By Product Category                                        Quantity                Cost                     Market

Furniture:

Chairs                                                                       40                      $40                        $   46

Desks                                                                       20                         88                              73

Tables                                                                      60                         99                            107

Accessories:

 Rugs                                                                        30                         75                               63

 Lamps                                                                     60                         37                               33

 

 

Required:

1.Determine the carrying value of inventory at year-end, assuming the lower of cost or market (LCM) rule is applied to (a) individual products, (b) product categories, and (c) total inventory.

2.Assuming inventory write-downs are common for Home Stop, record any necessary year-end adjustment amount for each of the LCM applications in requirement 1.

 

Complete this question by entering your answers in the tabs below.

 

Required 1:

 

                                                                                                                               Lower of cost or market

Product                           Cost                   Market        By Individual       By Product          By Total

                                                                                            Products             Categories         Inventory

Furniture:

  Chairs                              ______              _______        _________

  Desks                              _______            ________      _________

  Tables                             _______            ________      _________

  Total Furniture

Accessories:

   Rugs                                ______            ________       _________

   Lamps                            _______          _________      _________

     Total accessories  

Total                                  _______         _________     __________

 

 

Required 2.

 

  • Individual products ____________
  • Product categories ____________
  • Total inventory _______________ 
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