Lower-of-Cost-or-Market Method On the basis of the following data, determine the value of the inventory at the lower-of-cost-or-market by applying lower-of-cost-or-market to each inventory item, as shown in Exhibit 10. Item. Inventory Quantity JFW1 SAW9 69 131 Market Value per Unit Cost per Unit (Net Realizable Value) $50 26 $45 30

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Chapter1: Financial Statements And Business Decisions
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Lower-of-Cost-or-Market Method
On the basis of the following data, determine the value of the inventory at the lower-of-cost-or-market by applying lower-of-cost-or-market to each inventory item, as
shown in Exhibit 10.
Item Inventory Quantity
JFW1
SAW9
X
69
131
Cost per Unit
$50
26
Market Value per Unit
(Net Realizable Value)
$45
30
Transcribed Image Text:Lower-of-Cost-or-Market Method On the basis of the following data, determine the value of the inventory at the lower-of-cost-or-market by applying lower-of-cost-or-market to each inventory item, as shown in Exhibit 10. Item Inventory Quantity JFW1 SAW9 X 69 131 Cost per Unit $50 26 Market Value per Unit (Net Realizable Value) $45 30
Item
Echo
Foxtrot
Sierra
Tango
Total
Class 1:
Echo
Foxtrot
Subtotal
Class 2:
Sierra
Tango
Subtotal
Total
Echo
Foxtrot
Sierra
Tango
Total
Inventory Cost per
Quantity
Unit
400
120
600
280
400
120
600
280
400
120
600
280
$10.25
22.50
8.00
14.00
$10.25
22.50
8.00
14.00
$10.25
22.50
8.00
14.00
Market Value
per Unit
(Net Realizable Value)
$9.50
24.10
7.75
14.75
$9.50
24.10
7.75
14.75
$9.50
24.10
7.75
14.75
Cost
$4,100
2,700
4,800
4,650
3,920 4,130
$15,520 $15,472
Exhibit 10
Determining Inventory at Lower of Cost or Market (LCM)
$ 4,800
3,920
Market
$4,100 $ 3,800
2,700
2,892
$ 6,800
$6,692
$4,100.
2,700
$ 3,800
2,892
$ 4,650
4,130
$8.720 $8,780
$15,520 $15,472
$ 3,800
2,892
4,800
4,650
3,920
4,130
$15.520 $15472
Lower of
Cost or Market
(LCM)
$ 3,800
2,700
4,650
3,920
$15,070
$ 6,692
8,720
$15,412
$15,472
(1)
Applied
Individual Item
by Item
(2)
Applied Class
by Class
(3)
Applied in
Total
Transcribed Image Text:Item Echo Foxtrot Sierra Tango Total Class 1: Echo Foxtrot Subtotal Class 2: Sierra Tango Subtotal Total Echo Foxtrot Sierra Tango Total Inventory Cost per Quantity Unit 400 120 600 280 400 120 600 280 400 120 600 280 $10.25 22.50 8.00 14.00 $10.25 22.50 8.00 14.00 $10.25 22.50 8.00 14.00 Market Value per Unit (Net Realizable Value) $9.50 24.10 7.75 14.75 $9.50 24.10 7.75 14.75 $9.50 24.10 7.75 14.75 Cost $4,100 2,700 4,800 4,650 3,920 4,130 $15,520 $15,472 Exhibit 10 Determining Inventory at Lower of Cost or Market (LCM) $ 4,800 3,920 Market $4,100 $ 3,800 2,700 2,892 $ 6,800 $6,692 $4,100. 2,700 $ 3,800 2,892 $ 4,650 4,130 $8.720 $8,780 $15,520 $15,472 $ 3,800 2,892 4,800 4,650 3,920 4,130 $15.520 $15472 Lower of Cost or Market (LCM) $ 3,800 2,700 4,650 3,920 $15,070 $ 6,692 8,720 $15,412 $15,472 (1) Applied Individual Item by Item (2) Applied Class by Class (3) Applied in Total
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