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Inventory Write-Down Palmquist Company has five different inventory items and applies the inventory valuation rules on an individual item basis. The normal markup on all items is 20% of cost. The following information is obtained from the company's records: Item Cost Replacement Cost Net Realizable Value $ 9.10 $ 9.20 8.10 7.80 13.50 14.00 12.00 17.00 25.50 25.30 1 2 3 4 5 Required: Item 1. Assume that Palmquist uses the FIFO cost flow assumption. Compute the correct inventory value under the lower of cost or net realizable value rule. Round your answers to the nearest cent. Lower of Cost or NRV 9.20 1 2 $ 3 4 5 Item $ 1 Units 500 400 300 200 100 2 3 4 5 $10.00 8.00 15.00 18.00 25.00 Compute the total inventory value if the lower of cost or net realizable value is applied to each individual item. 16,900 X $ 7.80 14 2. Assume that Palmquist uses the LIFO cost flow assumption. Compute the correct inventory value under the lower of cost or market rule. Round your answers to the nearest cent. Lower of Cost or Market 17 25.00 ✔ 4,600 X 3,120 X 4,050 X 2,680 X 2,500 X Compute the total inventory value if the lower of cost or market is applied to each individual item.

Inventory Write-Down Palmquist Company has five different inventory items and applies the inventory valuation rules on an individual item basis. The normal markup on all items is 20% of cost. The following information is obtained from the company's records: Item Cost Replacement Cost Net Realizable Value $ 9.10 $ 9.20 8.10 7.80 13.50 14.00 12.00 17.00 25.50 25.30 1 2 3 4 5 Required: Item 1. Assume that Palmquist uses the FIFO cost flow assumption. Compute the correct inventory value under the lower of cost or net realizable value rule. Round your answers to the nearest cent. Lower of Cost or NRV 9.20 1 2 $ 3 4 5 Item $ 1 Units 500 400 300 200 100 2 3 4 5 $10.00 8.00 15.00 18.00 25.00 Compute the total inventory value if the lower of cost or net realizable value is applied to each individual item. 16,900 X $ 7.80 14 2. Assume that Palmquist uses the LIFO cost flow assumption. Compute the correct inventory value under the lower of cost or market rule. Round your answers to the nearest cent. Lower of Cost or Market 17 25.00 ✔ 4,600 X 3,120 X 4,050 X 2,680 X 2,500 X Compute the total inventory value if the lower of cost or market is applied to each individual item.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Inventory Write-Down Palmquist Company has five different inventory items and applies the inventory valuation rules on an individual item basis. The normal markup on all items is 20% of cost. The following information is obtained from the company's records: Cost Replacement Cost Net Realizable Value $10.00 $9.20 7.80 8.00 15.00 18.00 25.00 Item 1 4 5 Required: 1 Item 2 3 1. Assume that Palmquist uses the FIFO cost flow assumption. Compute the correct inventory value under the lower of cost or net realizable value rule. Round your answers to the nearest cent. Lower of Cost or NRV 4 5 2 3 1 Item 2 3 4 5 $ Units 500 400 300 200 100 Compute the total inventory value if the lower of cost or net realizable value is applied to each individual item. $ 16,900 X 2. Assume that Palmquist uses the LIFO cost flow assumption. Compute the correct inventory value under the lower of cost or market rule. Round your answers to the nearest cent. Lower of Cost or Market 9.20 ✓ 7.80 ✓ $ 14 ✓ 17 ✓ 25.00 ✓ $9.10 8.10 13.50 12.00 25.50 14.00 17.00 25.30 4,600 X 3,120 X 4,050 X 2,680 X 2,500 X Compute the total inventory value if the lower of cost or market is applied to each individual item.
Transcribed Image Text:Inventory Write-Down Palmquist Company has five different inventory items and applies the inventory valuation rules on an individual item basis. The normal markup on all items is 20% of cost. The following information is obtained from the company's records: Cost Replacement Cost Net Realizable Value $10.00 $9.20 7.80 8.00 15.00 18.00 25.00 Item 1 4 5 Required: 1 Item 2 3 1. Assume that Palmquist uses the FIFO cost flow assumption. Compute the correct inventory value under the lower of cost or net realizable value rule. Round your answers to the nearest cent. Lower of Cost or NRV 4 5 2 3 1 Item 2 3 4 5 $ Units 500 400 300 200 100 Compute the total inventory value if the lower of cost or net realizable value is applied to each individual item. $ 16,900 X 2. Assume that Palmquist uses the LIFO cost flow assumption. Compute the correct inventory value under the lower of cost or market rule. Round your answers to the nearest cent. Lower of Cost or Market 9.20 ✓ 7.80 ✓ $ 14 ✓ 17 ✓ 25.00 ✓ $9.10 8.10 13.50 12.00 25.50 14.00 17.00 25.30 4,600 X 3,120 X 4,050 X 2,680 X 2,500 X Compute the total inventory value if the lower of cost or market is applied to each individual item.
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