Lower-of-cost-or-market value: The lower-of-cost-or-market value is a method which requires the reporting of the ending merchandise inventory in the financial statement of a company, at its current market value (net realizable value) or at its historical cost price, whichever is less. To determine: value of inventory using first in first out method under lower-of-cost-or-market inventory.

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Chapter 6, Problem 6.6BPR

To determine

Lower-of-cost-or-market value:

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

To determine: value of inventory using first in first out method under lower-of-cost-or-market inventory.

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Lower-of-Cost-or-Market Inventory Data on the physical inventory of Ashwood Products Company as of December 31 follow: Description InventoryQuantity Market Value per Unit (Net Realizable Value) B12 38 $ 57 E41 18 180 G19 33 126 L88 18 550 N94 400 7 P24 90 18 R66 8 250 T33 140 20 Z16 15 752 Quantity and cost data from the last purchases invoice of the year and the next-to-the-last purchases invoice are summarized as follows: LastPurchases Invoice Next-to-the-LastPurchases Invoice Description QuantityPurchased UnitCost QuantityPurchased UnitCost B12 30 $ 60 30 $ 59 E41 35 178 20 180 G19 20 128 25 129 L88 10 563 10 560 N94 500 8 500 7 P24 80 22 50 21 R66 5 248 4 260 T33 100 21 100 19 Z16 10 750 9 745…

Lower-of-cost-or-market inventory Data on the physical inventory of Ashwood Products Company as of December 31 follow: Description InventoryQuantity Market Value per Unit(Net Realizable Value) B12 38 $57 E41 18 180 G19 33 126 L88 18 550 N94 400 7 P24 90 18 R66 8 250 T33 140 20 Z16 15 752 Quantity and cost data from the last purchases invoice of the year and the next-to-the-last purchases invoice are summarized as follows: Description LastPurchasesInvoiceQuantityPurchased LastPurchasesInvoiceUnit Cost Next-to-the-LastPurchasesInvoiceQuantityPurchased Next-to-the-LastPurchasesInvoiceUnit Cost B12 30 $60 30 $59 E41 35 178 20 180 G19 20 128 25 129 L88 10 563 10 560 N94 500 8 500 7 P24 80 22 50 21 R66 5 248 4 260 T33 100 21 100 19 Z16 10 750 9 745 Required: Determine the inventory at cost and also at the lower of cost or market applied on an item-by-item basis, using the first-in, first-out method. Record the appropriate unit costs on the…

Data on the physical inventory of Katus Products Co. as of December 31 follow: Market Value per Unit (Net Realizable Value) $ 56 Inventory Item Inventory Quantity A54 37 C77 24 178 F66 30 132 H83 21 545 K12 375 Q58 90 18 S36 235 20 V97 140 Y88 744 17 Quantity and cost data from the last purchases invoice of the year and the next-to-the-last purchases invoice are summarized as follows: Last Next-to-the-Last Purchases Invoice Purchases Invoice Quantity Unit Purchased Cost Unit Inventory Item Quantity Purchased Cost $ 60 A54 30 40 $58 C7 25 174 15 180 F66 20 130 15 128 H83 547 15 540 K12 500 500 Q58 75 25 80 26 S36 256 4 260 V97 100 17 115 16 Y88 10 750 740 Instructions Determine the inventory at cost as well as at the lower of cost or market, using the first-in, first-out method. Record the appropriate unit costs on the inventory sheet and complete the pricing of the inventory. When there are two different unit costs applicable to an item: 1. Draw a line through the quantity and insert…