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Lower of Cost or Market Shaw Systems sells a limited line of specially made products, using television advertising campaigns in large cities. At year end, Shaw has the following data for its inventory: Item Number of Units Historical Cost per Unit Selling Price per Unit Disposal Costs Phone 625       $24            $25           $5       Stereo 180       177            200           10       Electric shaver 215

Lower of Cost or Market Shaw Systems sells a limited line of specially made products, using television advertising campaigns in large cities. At year end, Shaw has the following data for its inventory: Item Number of Units Historical Cost per Unit Selling Price per Unit Disposal Costs Phone 625       $24            $25           $5       Stereo 180       177            200           10       Electric shaver 215

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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Lower of Cost or Market

Shaw Systems sells a limited line of specially made products, using television advertising campaigns in large cities. At year end, Shaw has the following data for its inventory:

Item Number of Units Historical Cost per Unit Selling Price per Unit Disposal Costs
Phone 625       $24            $25           $5      
Stereo 180       177            200           10      
Electric shaver 215       30            31           3      
MP3 alarm clock 450       26            27           2      
Handheld game system 570       40            45           3      

Required:

Question Content Area

1.  Compute the carrying value of the ending inventory using the lower of cost or net realizable value rule applied on an item-by-item basis.
$fill in the blank 7d60f2ffbfc9f83_1

 

Question Content Area

2.  Prepare the journal entry required to value the inventory at lower of cost or net realizable value. If an amount box does not require an entry, leave it blank.

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