Valuing Inventory at Lower of Cost or Market Management of Tarry Company reports the following inventory using LIFO and applies the lower of cost or market rule. ■ Edgers: 1,680 units in inventory; cost is $22 each; replacement cost is $16 each; estimated sale price is $30 each; estimated distribution cost is $3 each; and normal profit is 10% of sale price. ■ Clippers: 1,120 units in inventory; cost is $50 each; replacement cost is $36 each; estimated sale price is $90 each; estimated distribution cost is $28 each; and normal profit is 20% of sale price. Required a. Determine the inventory cost to report on the balance sheet assuming that the company applies the lower of cost or market rule to each inventory item. b. Prepare the journal entry to apply the lower of cost or market rule to inventory assuming that the company adjusts inventory directly and adjusts equity through cost of goods sold. a. Inventory valuation for edgers $ Inventory valuation for clippers Total inventory valuation b. Account Name 0 To apply the lower of cost or market rule to inventory. Dr. Cr.

Valuing Inventory at Lower of Cost or Market Management of Tarry Company reports the following inventory using LIFO and applies the lower of cost or market rule. ■ Edgers: 1,680 units in inventory; cost is $22 each; replacement cost is $16 each; estimated sale price is $30 each; estimated distribution cost is $3 each; and normal profit is 10% of sale price. ■ Clippers: 1,120 units in inventory; cost is $50 each; replacement cost is $36 each; estimated sale price is $90 each; estimated distribution cost is $28 each; and normal profit is 20% of sale price. Required a. Determine the inventory cost to report on the balance sheet assuming that the company applies the lower of cost or market rule to each inventory item. b. Prepare the journal entry to apply the lower of cost or market rule to inventory assuming that the company adjusts inventory directly and adjusts equity through cost of goods sold. a. Inventory valuation for edgers $ Inventory valuation for clippers Total inventory valuation b. Account Name 0 To apply the lower of cost or market rule to inventory. Dr. Cr.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Presented below is information related to Blue Company. cost Retail Begininng Inventory $59,780 $98,000 Purchases (net) $132,070 196,100 Net markups 11,067 Net markdowns 23,589 Sales Revenue 176,870 Compute the ending inventory at retail.
Submit it in excel form
acc
3
What is another way of saying "Interest earned on interest"?
Please give answer
The following is the detail of the purchase and sale of inventory of a product of Simco Co. May 1 Beg. Inventory 60 units @ $220 May 2 Purchase 100 units @ $216 May 14 Purchase 50 units @ $224 May 22 Purchase 60 units @ $234 May 30 Sale 200 units Required: 1. Compute the cost of goods sold and cost of ending inventory for Simco Co. for May under the FIFO, LIFO, and weighted average cost assumptions. 2. Which method results in Simco Co. paying the least tax?
Valuing Inventory at Lower-of-Cost-or-Market Management of Tarry Company takes the position that under the lower-of-cost-or-market rule, the two items below are reported in ending inventory at $119,520 (total). Inventory cost is reported using LIFO. • Edgers: 2,160 in inventory; cost is $22 each; replacement cost is $16 each; estimated sale price is $30 each; estimated distribution cost is $3 each; and normal profit is 10% of sale price. • Hedge clippers: 1,440 in inventory; cost is $50 each; replacement cost is $36 each; estimated sale price is $90 each; estimated distribution cost is $28 each; and normal profit is 20% of sale price. a. Compute your inventory valuation by item and in total for the Tarry Company inventory reported above. Inventory valuation for edgers $ Inventory valuation for hedge clippers Total inventory valuation b. Prepare the entry, if any, to report inventory at the lower-of-cost-or-market. Assume that all adjustments directly impact cost of goods sold and…
Valuing Inventory at Lower-of-Cost-or-Market Gard Inc. has compiled the following information related to its five products. Costs of disposal are estimated to be 10% of selling price, and gross profit is estimated to be 25% of the selling price. Determine the value of inventory applying the lower-of-cost-or-market rule to each individual inventory item. Note: Round each amount to the nearest dollar. #1 #2 #3 #4 #5 Estimated selling price $66 $76 $82 $100 $130 Original cost (LIFO) 45 48 60 63 90 Replacement cost 50 70 49 66 83 Inventory at the lower-of-cost-or-market $ (10) x $ (11) x $ (12) x $ (25) х $ (20) x
A company has the following information for the current year's operations: Beginning inventory Purchases Net markups Net markdowns Net sales Multiple Choice O Average cost. Management calculates the cost-to-retail percentage as 57.9%, equal to cost of $440,000 ($40,000+ $400,000) divided by retail of $760,000 ($60,000+ $660,000+ $50,000 $10,000). Which application of the retail inventory method is the company using? O O LIFO. Conventional. Cost $ 40,000 400,000 Dollar-value LIFO. Retail $60,000 660,000 50,000 10,000 580,000
Tatum Company has four products in its inventory. Information about the Decemnber 31, 2021, Inventory is as follows: Total Net Realizable Value Product 101 Total Cost $134,000 97,000 67,000 37,000 $107,000 117,000 57,000 57,000 102 103 104 Required: 1. Determine the carrying value of inventory at December 31, 2021, assuming the lower of cost or net realizable value (LCNRV) rule is applied to individual products. 2. Assuming that inventory write-downs are common for Tatum Company, record any necessary year-end adjusting entry. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Determine the carrying value of inventory at December 31, 2021, assuming the lower of cost or net realizable value (LCNRV) rule is applied to individual products. Inventory Value Product Cost NRV 101 S. 134,000 107,000 102 97,000 117,000 57,000 67,000 37,000 103 104 57,000 S. 335,000 Required 2 > Prev 1 of 9 Next > Profile (1).pdf Profile.pdf Profile (1) .pdf
sss