Ruan Shipping Co. follows the practice of pricing its inventory at the lower-of-cost-or-market, on an individual-item basis. From the information included below, determine (a) the amount of the write-off required Ruan to record inventory at the lower-of-cost-or-market and (b) the final value of Ruan's inventory. Item Qua Cost Cost to Est. Cost to Normal 1320 1,200 $ 3.20 $ 3.00 $ 4.50 $ 0.35 $ 1.25 1333 900 $ 2.70 $ 2.30 $ 3.40 $0.50 $0.50 1426 800 $ 4.50 $ 3.70 $5.00 $ 0.40 $ 1.00 1427 1,000 $ 3.60 $ 3.10 $ 3.20 $ 0.45 $ 0.90 1510 700 $2.25 $ 2.00 $3.25 $ 0.80 $ 0.60 1522 500 $ 3.00 $ 2.70 $ 3.90 $ 0.40 $0.50 1573 3,000 $ 1.80 $ 1.60 $ 2.50 $ 0.75 $0.50 1626 1,000 $ 4.70 $5.20 $ 6.00 $ 0.50 $ 1.00

Principles of Accounting Volume 1
19th Edition
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax
Chapter10: Inventory
Section: Chapter Questions
Problem 9PB: Calculate a) cost of goods sold, b) ending inventory, and c) gross margin for B76 Company,...
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Ruan Shipping Co. follows the practice of pricing its inventory at the
lower-of-cost-or-market, on an individual-item basis. From the
information included below, determine (a) the amount of the write-off
required Ruan to record inventory at the lower-of-cost-or-market and (b)
the final value of Ruan's inventory.
Item
Qua
Cost
Cost to Est.
Cost to
Normal
1320 1,200
$ 3.20
$ 3.00
$ 4.50
$ 0.35
$ 1.25
1333 900
$ 2.70
$ 2.30
$ 3.40
$0.50
$0.50
1426
800
$ 4.50
$ 3.70
$5.00
$ 0.40
$ 1.00
1427 1,000
$ 3.60
$ 3.10
$ 3.20
$ 0.45
$ 0.90
1510 700
$2.25
$ 2.00
$3.25
$ 0.80
$ 0.60
1522 500
$ 3.00
$ 2.70
$ 3.90
$ 0.40
$0.50
1573 3,000
$ 1.80
$ 1.60
$ 2.50
$ 0.75
$0.50
1626 1,000
$ 4.70
$5.20
$ 6.00
$ 0.50
$ 1.00
Transcribed Image Text:Ruan Shipping Co. follows the practice of pricing its inventory at the lower-of-cost-or-market, on an individual-item basis. From the information included below, determine (a) the amount of the write-off required Ruan to record inventory at the lower-of-cost-or-market and (b) the final value of Ruan's inventory. Item Qua Cost Cost to Est. Cost to Normal 1320 1,200 $ 3.20 $ 3.00 $ 4.50 $ 0.35 $ 1.25 1333 900 $ 2.70 $ 2.30 $ 3.40 $0.50 $0.50 1426 800 $ 4.50 $ 3.70 $5.00 $ 0.40 $ 1.00 1427 1,000 $ 3.60 $ 3.10 $ 3.20 $ 0.45 $ 0.90 1510 700 $2.25 $ 2.00 $3.25 $ 0.80 $ 0.60 1522 500 $ 3.00 $ 2.70 $ 3.90 $ 0.40 $0.50 1573 3,000 $ 1.80 $ 1.60 $ 2.50 $ 0.75 $0.50 1626 1,000 $ 4.70 $5.20 $ 6.00 $ 0.50 $ 1.00
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