Unit ReplacementProductQuantityUnit CostForest Company has five products in its Inventory. Information about ending Inventory follows.CostUnit SellingPriceA900$ 29$ 31$ 35B900343037C900222127D900262325E1,000333132The cost to sell for each product consists of a 20 percent sales commission. The normal profit for each product is 40 percent of theselling price.Required:1. Determine the carrying value of ending Inventory, assuming the lower of cost or market (LCM) rule is applied to Individualproducts.2. Determine the carrying value of Inventory, assuming the LCM rule is applied to the entire Inventory.3. Assuming Inventory write-downs are common for Forest, record any necessary year-end adjusting entry based on the amountcalculated in requirement 2.Complete this question by entering your answers in the tabs below.Required 1 Required 2 Required 3Determine the carrying value of ending inventory, assuming the lower of cost or market (LCM) rule is applied to individualproducts.Note: Do not round intermediate calculations.Product(units)RCNRVNRV minus NPMarketCostInventoryvalueA (900)B (900)C (900)D (900)E (1,000)Total$0$0 $0

Under LCM, the "market value" is the middle of these three:Replacement CostCeiling = Net Realizable…

Answered: Unit Replacement Product Quantity Unit…

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter5: Inventories And Cost Of Goods Sold

Section: Chapter Questions

Problem 5.4DC

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Sterling Corporation has an EOQ of 5,000 units. The company uses an average of 500 units per day. An order to replenish the part requires a lead time of five days. Required: 1. Calculate the reorder point, using Equation 20.3. 2. Graphically display the reorder point, where the vertical axis is inventory (units) and the horizontal axis is time (days). Show two replenishments, beginning at time zero with the economic order quantity in inventory. 3. What if the average usage per day of the part is 500 units but a daily maximum usage of 575 units is possible? What is the reorder point when this demand uncertainty exists?
Forest Company has five products in its inventory. Information about ending inventory follows. Unit Replacement Unit Selling Cost Price $ 21 $ 25 20 27 17 15 22 Product Quantity A 900 B 800 C D E 1,000 500 800 Unit Cost $19 24 12 16 23 The cost to sell for each product consists of a 15 percent sales commission. The normal profit for each product is 25 percent of the selling price. Required: 1. Determine the carrying value of ending inventory, assuming the lower of cost or market (LCM) rule is applied to individual products. 2. Determine the carrying value of inventory, assuming the LCM rule is applied to the entire inventory. 3. Assuming inventory write-downs are common for Forest, record any necessary year-end adjusting entry based on the amount calculated in requirement 2. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Product (units) A (900) B (800) C (1,000) D (500) E (800) 11 13 21 Determine the carrying value of ending…
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n The inventory of Royal Decking consisted of five products. Information about ending inventory is as follows: Product A B C D E Product Cost $ 58 98 ADCOE 58 118 А 38 Selling costs consist of a sales commission equal to 15% of selling price and shipping costs equal to 5% of cost. The normal profit is 40% of selling price. Per Unit Replacement Cost Required: What unit value should Royal Decking use for each of its products when applying the lower of cost or market (LCM) rule to units of ending inventory? Note: Do not round intermediate calculations. Round final answers to 2 decimal places. $ 53 88 73 88 46 Cost Replacement. cost Selling Price $ 78 118 98 148 48 $ 58 $ 98 58 118 38 53 88 73 88 46 NRV NRV minus NP Market Per Unit Inventory. Value
. Beech Corporation has three finished products (related to three different product lines) in its ending inventory at December 31, Year 1. The following table provides additional information about each product: Product Cost Replacement Selling Normal Profit Cost Price Margin 101 $130 $140 $160 20% 202 $160 $135 $140 20% 303 $100 $ 80 $100 15% Beech Corporation expects to incur selling costs equal to 5 percent of the selling price on each of the products. Required: Determine the amount at which Beech should report its inventory on the December 31, Year 1 balance sheet under (1) IFRS and (2) U.S. GAAP.
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Skiped think Pred erences The inventory of Royal Decking consisted of five products. Information about ending inventory is as follows: Per Unit Replacement Cont $.38 73 Product A B C D E Product A B C OL Cont $:43 83 43 Selling costs consist of a sales commission equal to 10% of selling price and shipping costs equal to 5% of cost. The normal profit is 40% of selling price. D 103 23 Required: What unit value should Royal Decking use for each of its products when applying the lower of cost or market (LCM) rule to units of ending inventory? Note: Do not round intermediate calculations. Round final answers to 2 decimal places. E Cost 58 73 31 $ 43 $ 83 43 103 23 Replacement cost 82365 73 Selling Price $ 63 73 103 83 133 33 31 NRV NRV minus NP

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