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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Topic Video
Question
help
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.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education