The accountant for Murphy Company prepared the following analysis of its inventory at year end: Item Units Cost per Unit Net Realizable Value RSK-89013 460 $38 $44 LKW-91247 329 49 45 QEC-57429 462 25 33 Required: 1. Compute the carrying value of the ending inventory using the lower of cost or market method applied on an item-by-item basis. 2. Prepare the journal entry required to value the inventory at lower of cost or market. (Inventory adjustment to market value)
The accountant for Murphy Company prepared the following analysis of its inventory at year end: Item Units Cost per Unit Net Realizable Value RSK-89013 460 $38 $44 LKW-91247 329 49 45 QEC-57429 462 25 33 Required: 1. Compute the carrying value of the ending inventory using the lower of cost or market method applied on an item-by-item basis. 2. Prepare the journal entry required to value the inventory at lower of cost or market. (Inventory adjustment to market value)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![The accountant for Murphy Company prepared the following analysis of its inventory at year end:
Item
Units
Cost per Unit Net Realizable Value
RSK-89013
460
$38
$44
LKW-91247
329
49
45
QEC-57429
462
25
33
Required:
1. Compute the carrying value of the ending inventory using the lower of cost or market method applied on an item-by-item basis.
2. Prepare the journal entry required to value the inventory at lower of cost or market.
(Inventory adjustment to market value)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F6c56831c-b6bf-4c14-bef3-4873954c280a%2Fc29caf3e-8fe1-4663-90a2-367148d27332%2F21kyjh8_processed.png&w=3840&q=75)
Transcribed Image Text:The accountant for Murphy Company prepared the following analysis of its inventory at year end:
Item
Units
Cost per Unit Net Realizable Value
RSK-89013
460
$38
$44
LKW-91247
329
49
45
QEC-57429
462
25
33
Required:
1. Compute the carrying value of the ending inventory using the lower of cost or market method applied on an item-by-item basis.
2. Prepare the journal entry required to value the inventory at lower of cost or market.
(Inventory adjustment to market value)
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