Chapter 6, Problem 6.35BP

1.

To determine

The lower-of-cost-or-market (LCM) is a method which requires the reporting of the ending merchandise inventory in the financial statement of a company, at its current market value or at is historical cost price, whichever is less.

To Record: The journal entries.

2.

To determine

The amount for merchandise inventory that should reported by the company on the balance sheet.

3.

To determine

The amount for cost of goods sold that should reported by the company on the income statement.

4.

To determine

To Mention: The accounting principle or concept which is most relevant to the above situation.