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)

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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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)
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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