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 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 inventory sheet, and complete the pricing of the inventory. When there are two different unit costs applicable to an item, proceed as follows: Insert the quantity and unit cost of the last purchase. On the following line, insert the quantity and unit cost of the next-to-the-last purchase. Total the cost and market columns and insert the lower of the two totals in the LCM column. The first item on the inventory sheet has been completed as an example. Inventory SheetDecember 31 Description Inventory Quantity Cost Per Unit Market Valueper Unit(Net RealizableValue) Total Cost Market LCM B12 38 30 $60 $57 $1,800 $1,710 8 59 57 472 456 2,272 2,166 $2,166 E41 18 G19 33 L88 18 N94 400 P24 90 R66 8 T33 140 Z16 15 Total $ $ $

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 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 inventory sheet, and complete the pricing of the inventory. When there are two different unit costs applicable to an item, proceed as follows: Insert the quantity and unit cost of the last purchase. On the following line, insert the quantity and unit cost of the next-to-the-last purchase. Total the cost and market columns and insert the lower of the two totals in the LCM column. The first item on the inventory sheet has been completed as an example. Inventory SheetDecember 31 Description Inventory Quantity Cost Per Unit Market Valueper Unit(Net RealizableValue) Total Cost Market LCM B12 38 30 $60 $57 $1,800 $1,710 8 59 57 472 456 2,272 2,166 $2,166 E41 18 G19 33 L88 18 N94 400 P24 90 R66 8 T33 140 Z16 15 Total $ $ $

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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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	Inventory Quantity	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:

	Last Purchases Invoice		Next-to-the-Last Purchases Invoice
Description	Quantity Purchased	Unit Cost		Quantity Purchased	Unit 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 inventory sheet, and complete the pricing of the inventory. When there are two different unit costs applicable to an item, proceed as follows:

Insert the quantity and unit cost of the last purchase.
On the following line, insert the quantity and unit cost of the next-to-the-last purchase.
Total the cost and market columns and insert the lower of the two totals in the LCM column.

The first item on the inventory sheet has been completed as an example.

Inventory Sheet December 31
Description	Inventory Quantity	Cost Per Unit	Market Value per Unit (Net Realizable Value)	Total
Cost	Market	LCM
B12	38	30	$60	$57	$1,800	$1,710
		8	59	57	472	456
					2,272	2,166	$2,166
E41	18
G19	33


L88	18


N94	400
P24	90


R66	8


T33	140


Z16	15


Total					$	$	$

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