Sandals Company is preparing the annual financial statements dated December 31. Ending inventory is presentlyrecorded at its total cost of $10,250. Information about its inventory items follows:Unit Cost WhenAcquired(FIFO)QuantityProduct Line on HandValue atYear-EndAir Flow25$ 90$ 92Blister158076BusterCoolonite70Dudesly602020139096Required:1. Compute the LCM/NRV write-down per unit and in total for each item in the table. Also compute the total overallwrite-down for all items.2. How will the write-down of inventory to lower of cost or market/net realizable value affect the company's expensesreported for the year ended December 31?3. Compute the amount that should be reported for the inventory on December 31, after the LCM/NRV rule has beenapplied to each item.Complete this question by entering your answers in the tabs below.Required Required Required123Compute the LCM/NRV write-down per unit and in total for each item in the table. Alsocompute the total overall write-down for all items.Write-TotalQuantityProduct LinedownWrite-on Handper itemdownAir Flow25Blister Buster15Coolonite70Dudesly60Total< Required 1Required 2 >

Name: Sandals Company is preparing the annual financial statements dated De
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Description: Sandals Company is preparing the annual financial statements dated December 31. Ending inventory is presentlyrecorded at its total cost of $10,250. Information about its inventory items follows:Unit Cost WhenAcquired(FIFO)QuantityProduct Line on Han

Lower of cost or market is an approach to valuation of inventory. The concept of lower of cost and…

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Accounting

Sandals Company is preparing the annual financial statements dated December 31. Ending inventory is presently recorded at its total cost of $10,250. Information about its inventory items follows: Unit Cost When Quantity Acquired Value at Product Line on Hand (FIFO) Year-End Air Flow 25 $ 90 $ 92 Blister 15 80 76 Buster Coolonite 70 20 13 Dudesly 60 90 96 Required:

Sandals Company is preparing the annual financial statements dated December 31. Ending inventory is presently recorded at its total cost of $10,250. Information about its inventory items follows: Unit Cost When Quantity Acquired Value at Product Line on Hand (FIFO) Year-End Air Flow 25 $ 90 $ 92 Blister 15 80 76 Buster Coolonite 70 20 13 Dudesly 60 90 96 Required:

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter10: Inventory

Section: Chapter Questions

Problem 2PA: Trini Company had the following transactions for the month. Calculate the ending inventory dollar...

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Concept explainers

Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.

Topic Video

Question

Sandals Company is preparing the annual financial statements dated December 31. Ending inventory is presently
recorded at its total cost of $10,250. Information about its inventory items follows:
Unit Cost When
Acquired
(FIFO)
Quantity
Product Line on Hand
Value at
Year-End
Air Flow
25
$ 90
$ 92
Blister
15
80
76
Buster
Coolonite
70
Dudesly
60
20
20
13
90
96
Required:
1. Compute the LCM/NRV write-down per unit and in total for each item in the table. Also compute the total overall
write-down for all items.
2. How will the write-down of inventory to lower of cost or market/net realizable value affect the company's expenses
reported for the year ended December 31?
3. Compute the amount that should be reported for the inventory on December 31, after the LCM/NRV rule has been
applied to each item.
Complete this question by entering your answers in the tabs below.
Required Required Required
1
2
3
Compute the LCM/NRV write-down per unit and in total for each item in the table. Also
compute the total overall write-down for all items.
Write-
Total
Quantity
Product Line
down
Write-
on Hand
per item
down
Air Flow
25
Blister Buster
15
Coolonite
70
Dudesly
60
Total
< Required 1
Required 2 >

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