McGoos Company's balance sheet currently states inventory at a total cost of $65,628. However, prices have declined during the year and McGoos is concerned the inventory may be overstated. McGoos has the following items in its ending inventory: Moos Pigoos Chickadoos Cost 24.60 19.20 34.20 Replacement Cost 22.20 18.00 31.80 Selling Price 27.60 27.00 37.50 Costs of CD&T 2.40 1.50 4.50 Normal Profit Margin % 30% 20% 10% Quantity 920 850 780 Required: a) Assuming the company uses FIFO, value the inventory at the lower of cost or net realizable value on an individual item basis, determine the total value of ending inventory, and prepare the journal entry to write-down the value of the ending inventory, if applicable. b) Assuming the company uses LIFO, value the inventory at the lower of cost or market on an individual item basis, determine the total value of ending inventory, and prepare the journal entry to write-down the value of the ending inventory, if applicable.

McGoos Company's balance sheet currently states inventory at a total cost of $65,628. However, prices have declined during the year and McGoos is concerned the inventory may be overstated. McGoos has the following items in its ending inventory: Moos Pigoos Chickadoos Cost 24.60 19.20 34.20 Replacement Cost 22.20 18.00 31.80 Selling Price 27.60 27.00 37.50 Costs of CD&T 2.40 1.50 4.50 Normal Profit Margin % 30% 20% 10% Quantity 920 850 780 Required: a) Assuming the company uses FIFO, value the inventory at the lower of cost or net realizable value on an individual item basis, determine the total value of ending inventory, and prepare the journal entry to write-down the value of the ending inventory, if applicable. b) Assuming the company uses LIFO, value the inventory at the lower of cost or market on an individual item basis, determine the total value of ending inventory, and prepare the journal entry to write-down the value of the ending inventory, if applicable.

Name: Problem 2 - Subsequent Inventory MeasurementMcGoos Company's balance
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Description: Problem 2 - Subsequent Inventory MeasurementMcGoos Company's balance sheet currently states inventory at a total cost of $65,628. However, priceshave declined during the year and McGoos is concerned the inventory may be overstated. McGoos hasthe fol

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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