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Lower of Cost or Net Realizable Value Sue Stone, the president of Tippecanoe Home Products, has prepared the following information for the company's television inventory at the end of the year: Model T-260 S-256 R-193 Quantity 11 24 18 FIFO Cost per Unit $200 325 210 Selling Price per Unit $480 330 250 Disposal Costs $35 30 20

Lower of Cost or Net Realizable Value Sue Stone, the president of Tippecanoe Home Products, has prepared the following information for the company's television inventory at the end of the year: Model T-260 S-256 R-193 Quantity 11 24 18 FIFO Cost per Unit $200 325 210 Selling Price per Unit $480 330 250 Disposal Costs $35 30 20

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 Net Realizable Value Sue Stone, the president of Tippecanoe Home Products, has prepared the following information for the company's television inventory at the end of the year: Model T-260 S-256 R-193 Z-376 Required: Quantity 11 24 18 12 Feedback FIFO Cost per Unit $200 325 210 285 Selling Price per Unit $480 330 Inventory Sales Revenue 250 290 1. Determine the carrying amount of the inventory using lower of cost or net realizable value applied on an item-by-item basis. 20,980 X Disposal Costs $35 30 20 40 Check My Work 1. Compare actual cost of inventory to its market value. The lower amount is the value of inventory. If market value is lower, the inventory account is adjusted. 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. X 88
Transcribed Image Text:Lower of Cost or Net Realizable Value Sue Stone, the president of Tippecanoe Home Products, has prepared the following information for the company's television inventory at the end of the year: Model T-260 S-256 R-193 Z-376 Required: Quantity 11 24 18 12 Feedback FIFO Cost per Unit $200 325 210 285 Selling Price per Unit $480 330 Inventory Sales Revenue 250 290 1. Determine the carrying amount of the inventory using lower of cost or net realizable value applied on an item-by-item basis. 20,980 X Disposal Costs $35 30 20 40 Check My Work 1. Compare actual cost of inventory to its market value. The lower amount is the value of inventory. If market value is lower, the inventory account is adjusted. 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. X 88
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