Chapter 5, Problem 5SP

Part A

To determine

1. The ending inventory when lower of cost or market is applied to the ending inventory as a whole and adjusts the reported inventory.
2. The ending inventory when lower of cost or market is applied to each of the product and adjusts the reported inventory.

Given info,

Inventory items	Units	Cost per unit ($)	Market per unit ($)
Office productivity	3	76	74
Desktop publishing	2	103	100
Accounting	3	90	96

Part B

To determine

1. Inventory turnover and days’ sales in inventory for the three months ended March 31, 2018.
2. Company’s performance as compared to others with the help of the above result and the given data.

Given info,
The beginning inventory amounts to $0.
Cost of goods sold $14,052.
The inventory as on March 31 is $704.
Competitor’s average inventory turnover is 15 times.
Competitor’s average days’ sales in inventory are 25 days.