Loose Leaf For Fundamentals Of Financial Accounting
6th Edition
ISBN: 9781260159547
Author: Phillips Associate Professor, Fred, Libby, Robert, Patricia
Publisher: McGraw-Hill Education
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Textbook Question
Chapter 7, Problem 11E
Reporting Inventory at Lower of Cost or Market/Net Realizable Value
Peterson Furniture Designs is preparing the annual financial statements dated December 31. Ending inventory information about the five major items stocked for regular sale follows:
Required:
- 1. Complete the table column “Write-Down per Item” and then sum the final column to compute the amount of the total write-down when the LCM/NRV rule is applied to each item.
- 2. Prepare the
journal entry Peterson Furniture Designs would record on December 31 to write down its inventory to LCM/NRV.
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Students have asked these similar questions
Peterson Furniture Designs is preparing the annual financial statements dated December 31. Ending inventory information about the
five major items stocked for regular sale follows:
Required:
1-a. Complete the table column "Write-Down per Item" and then sum the final column.
1-b. Compute the amount of the total write-down when the LCM/NRV rule is applied to each item.
2. Prepare the journal entry Peterson Furniture Designs would record on December 31 to write down its inventory to LCM/NRV.
Complete this question by entering your answers in the tabs below.
ces
Req 1A
Req 1B
Req 2
Complete the table column "Write-Down per Item" and then sum the final column.
Item
Unit Cost
(FIFO)
NRV per
Item
Write-down
per Item
Quantity on
Hand
Total Write-
down
Alligator Armoires
$
30 $
24
15
Bear Bureaus
37
37
50
Cougar Credenzas
37
43
55
Dingo Cribs
36
36
75
Elephant Dressers
32
30
35
Peterson Furniture Designs is preparing the annual financial statements dated December 31. Ending inventory information about the
five major items stocked for regular sale follows:
Required:
1-a. Complete the table column "Write-Down per Item" and then sum the final column.
1-b. Compute the amount of the total write-down when the LCM/NRV rule is applied to each item.
2. Prepare the journal entry Peterson Furniture Designs would record on December 31 to write down its inventory to LCM/NRV.
Complete this question by entering your answers in the tabs below.
Req 1A
Req 2
Complete the table column "Write-Down per Item" and then sum the final column.
NRV per
Item
Write-down
per item
Item
Alligator Armoires
Bear Bureaus
Cougar Credenzas
Dingo Cribs
Elephant Dressers
Req 18
Unit Cost
(FIFO)
$
40 $
31
34
20
24
88823
31
40
20
20
Reg 1A
Quantity on
Hand
40
15
90
85
35
Total Write-
down
Req 18 >
1a) Complete the table column “write down per item” and then sum the final column
1b) Compute the amount of the total write down when the LCM/NRV rule is applied to each item
2) prepare the journal entry Peterson furniture designs would record on December 31st to write down its inventory to LCM/ NRV
THANK YOU IN ADVANCE
Chapter 7 Solutions
Loose Leaf For Fundamentals Of Financial Accounting
Ch. 7 - What are three goals of inventory management?Ch. 7 - Describe the specific types of inventory reported...Ch. 7 - The chapter discussed four inventory costing...Ch. 7 - Which inventory cost flow method is most similar...Ch. 7 - Where possible, the inventory costing method...Ch. 7 - Contrast the effects of LIFO versus FIFO on ending...Ch. 7 - Contrast the income statement effect of LIFO...Ch. 7 - Several managers in your company are experiencing...Ch. 7 - Explain briefly the application of the LCM rule to...Ch. 7 - Prob. 10Q
Ch. 7 - You work for a made-to-order clothing company,...Ch. 7 - Prob. 12QCh. 7 - (Supplement 7B) Explain why an error in ending...Ch. 7 - Which of the following statements are true...Ch. 7 - The inventory costing method selected by a company...Ch. 7 - Which of the following is not a name for a...Ch. 7 - Which of the following correctly expresses the...Ch. 7 - A New York bridal dress designer that makes...Ch. 7 - If costs are rising, which of the following will...Ch. 7 - Which inventory method provides a better matching...Ch. 7 - Which of the following regarding the lower of cost...Ch. 7 - An increasing inventory turnover ratio a....Ch. 7 - In which of the following situations is an LCM/NRV...Ch. 7 - Matching Inventory Items to Type of Business Match...Ch. 7 - Reporting Goods in Transit Abercrombie Fitch Co....Ch. 7 - Prob. 3MECh. 7 - Reporting Inventory-Related Accounts in the...Ch. 7 - Matching Financial Statement Effects to Inventory...Ch. 7 - Matching Inventory Costing Method Choices to...Ch. 7 - Calculating Cost of Goods Available for Sale,...Ch. 7 - Calculating Cost of Goods Available for Sale,...Ch. 7 - Calculating Cost of Goods Available for Sale,...Ch. 7 - Prob. 10MECh. 7 - Calculating Cost of Goods Available for Sale, Cost...Ch. 7 - Calculating Cost of Goods Available for Sale, Cost...Ch. 7 - Calculating Cost of Goods Available for Sale, Cost...Ch. 7 - Reporting Inventory under Lower of Cost or...Ch. 7 - Preparing the Journal Entry to Record Lower of...Ch. 7 - Determining the Effects of Inventory Management...Ch. 7 - Interpreting LCM Financial Statement Note...Ch. 7 - Calculating the Inventory Turnover Ratio and Days...Ch. 7 - Prob. 19MECh. 7 - Prob. 20MECh. 7 - Prob. 21MECh. 7 - (Supplement 7A) Calculating Cost of Goods Sold and...Ch. 7 - (Supplement 7B) Determining the Financial...Ch. 7 - Prob. 24MECh. 7 - Reporting Goods in Transit and Consignment...Ch. 7 - Determining the Correct Inventory Balance Seemore...Ch. 7 - Determining the Correct Inventory Balance Seemore...Ch. 7 - Calculating Cost of Ending Inventory and Cost of...Ch. 7 - Calculating Cost of Ending Inventory and Cost of...Ch. 7 - Prob. 6ECh. 7 - Analyzing and Interpreting the Financial Statement...Ch. 7 - Evaluating the Effects of Inventory Methods on...Ch. 7 - Choosing LIFO versus FIFO When Costs Are Rising...Ch. 7 - Using FIFO for Multiproduct Inventory Transactions...Ch. 7 - Reporting Inventory at Lower of Cost or Market/Net...Ch. 7 - Reporting Inventory at Lower of Cost or Market/Net...Ch. 7 - Analyzing and Interpreting the Inventory Turnover...Ch. 7 - Analyzing and Interpreting the Effects of the...Ch. 7 - Prob. 15ECh. 7 - Analyzing and Interpreting the Financial Statement...Ch. 7 - Prob. 17ECh. 7 - Analyzing the Effects of Four Alternative...Ch. 7 - Evaluating the Income Statement and Income Tax...Ch. 7 - Calculating and Interpreting the Inventory...Ch. 7 - Prob. 4CPCh. 7 - (Supplement 7B) Analyzing and Interpreting the...Ch. 7 - Analyzing the Effects of Four Alternative...Ch. 7 - Evaluating the Income Statement and Income Tax...Ch. 7 - Prob. 3PACh. 7 - Prob. 4PACh. 7 - (Supplement 7B) Analyzing and Interpreting the...Ch. 7 - Prob. 1PBCh. 7 - Prob. 2PBCh. 7 - Prob. 3PBCh. 7 - Prob. 4PBCh. 7 - (Supplement 7B) Analyzing and Interpreting the...Ch. 7 - Prob. 1COPCh. 7 - (Supplement 7A) Recording Inventory Transactions,...Ch. 7 - (Supplement 7A) Recording Inventory Purchases,...Ch. 7 - (Supplement 7A) Recording Inventory Purchases,...Ch. 7 - Prob. 5COPCh. 7 - Prob. 6COPCh. 7 - Prob. 7COPCh. 7 - Prob. 8COPCh. 7 - Prob. 9COPCh. 7 - Prob. 10COPCh. 7 - Prob. 11COPCh. 7 - Prob. 12COPCh. 7 - Prob. 1SDCCh. 7 - Prob. 2SDCCh. 7 - Critical Thinking: Income Manipulation under the...Ch. 7 - Accounting for Changing Inventory Costs In...
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