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Sandals Company is preparing the annual financial statements dated December 31. Ending inventory is presently recorded at its total cost of $13,125. Information about its inventory items follows: Product Line Air Flow Quantity on Hand Unit Cost When Acquired (FIFO) 75 $ 80 Blister Buster Coolonite Dudes ly 20 15 65 65 95 10 Value at Year-End $ 87 9 93 16 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.

Sandals Company is preparing the annual financial statements dated December 31. Ending inventory is presently recorded at its total cost of $13,125. Information about its inventory items follows: Product Line Air Flow Quantity on Hand Unit Cost When Acquired (FIFO) 75 $ 80 Blister Buster Coolonite Dudes ly 20 15 65 65 95 10 Value at Year-End $ 87 9 93 16 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.

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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Sandals Company is preparing the annual financial statements dated December 31. Ending inventory is presently recorded at its total cost of $13,125. Information about its inventory items follows: Product Line Air Flow Quantity on Hand 75 Blister Buster Coolonite Dudes ly 20 65 65 Unit Cost When Acquired (FIFO) $ 80 15 95 10 Value at Year-End $ 87 9 93 16 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 1 Required 2 Required 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. Written-down inventory
Transcribed Image Text:Sandals Company is preparing the annual financial statements dated December 31. Ending inventory is presently recorded at its total cost of $13,125. Information about its inventory items follows: Product Line Air Flow Quantity on Hand 75 Blister Buster Coolonite Dudes ly 20 65 65 Unit Cost When Acquired (FIFO) $ 80 15 95 10 Value at Year-End $ 87 9 93 16 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 1 Required 2 Required 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. Written-down inventory
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