Explain the terms cost, and market used in the LCM inventory valuation rule.

Question

Want to see more full solutions like this?

Answer 1

Question

Chapter 8, Problem 1GI

To determine

Explain the terms cost, and market used in the LCM inventory valuation rule.

Expert Solution & Answer

Explanation of Solution

Lower-of-cost-or-market: 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.

Cost is the money paid to obtain a product or any item. In other words, cost is the purchase price. Such item for which cost is paid to acquire is capitalized and classified as an asset. The cost or purchase price is capitalized because it is categorized as a onetime event.

Market value is referred to as the current replacement cost which means it is necessary for the company to pay an amount for replacing the inventory

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Students have asked these similar questions

Financial Accounting Question need help

Expert of general accounting answer

What is the amount of the annual net income for the year?

Answer 2

Question

Chapter 8, Problem 1GI

To determine

Explain the terms cost, and market used in the LCM inventory valuation rule.

Expert Solution & Answer

Explanation of Solution

Lower-of-cost-or-market: 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.

Cost is the money paid to obtain a product or any item. In other words, cost is the purchase price. Such item for which cost is paid to acquire is capitalized and classified as an asset. The cost or purchase price is capitalized because it is categorized as a onetime event.

Market value is referred to as the current replacement cost which means it is necessary for the company to pay an amount for replacing the inventory

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 8, Problem 1GI

To determine

Explain the terms cost, and market used in the LCM inventory valuation rule.

Expert Solution & Answer

Explanation of Solution

Lower-of-cost-or-market: 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.

Cost is the money paid to obtain a product or any item. In other words, cost is the purchase price. Such item for which cost is paid to acquire is capitalized and classified as an asset. The cost or purchase price is capitalized because it is categorized as a onetime event.

Market value is referred to as the current replacement cost which means it is necessary for the company to pay an amount for replacing the inventory

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 8, Problem 1GI

To determine

Explain the terms cost, and market used in the LCM inventory valuation rule.

Expert Solution & Answer

Explanation of Solution

Lower-of-cost-or-market: 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.

Cost is the money paid to obtain a product or any item. In other words, cost is the purchase price. Such item for which cost is paid to acquire is capitalized and classified as an asset. The cost or purchase price is capitalized because it is categorized as a onetime event.

Market value is referred to as the current replacement cost which means it is necessary for the company to pay an amount for replacing the inventory

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 8, Problem 1GI

To determine

Explain the terms cost, and market used in the LCM inventory valuation rule.

Expert Solution & Answer

Explanation of Solution

Lower-of-cost-or-market: 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.

Cost is the money paid to obtain a product or any item. In other words, cost is the purchase price. Such item for which cost is paid to acquire is capitalized and classified as an asset. The cost or purchase price is capitalized because it is categorized as a onetime event.

Market value is referred to as the current replacement cost which means it is necessary for the company to pay an amount for replacing the inventory

Answer 6

Chapter 8, Problem 1GI

To determine

Explain the terms cost, and market used in the LCM inventory valuation rule.

Expert Solution & Answer

Explanation of Solution

Lower-of-cost-or-market: 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.

Cost is the money paid to obtain a product or any item. In other words, cost is the purchase price. Such item for which cost is paid to acquire is capitalized and classified as an asset. The cost or purchase price is capitalized because it is categorized as a onetime event.

Market value is referred to as the current replacement cost which means it is necessary for the company to pay an amount for replacing the inventory

Answer 7

Chapter 8, Problem 1GI

To determine

Explain the terms cost, and market used in the LCM inventory valuation rule.

Answer 8

Expert Solution & Answer

Explanation of Solution

Lower-of-cost-or-market: 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.

Cost is the money paid to obtain a product or any item. In other words, cost is the purchase price. Such item for which cost is paid to acquire is capitalized and classified as an asset. The cost or purchase price is capitalized because it is categorized as a onetime event.

Market value is referred to as the current replacement cost which means it is necessary for the company to pay an amount for replacing the inventory

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Ch. 8 - Prob. 1GI Ch. 8 - Define the upper and lower constraints used in the...Ch. 8 - How may a company apply the lower of cost or a...Ch. 8 - What is the major criticism of the lower of cost...Ch. 8 - Prob. 5GI Ch. 8 - Prob. 6GI Ch. 8 - Prob. 7GI Ch. 8 - Prob. 8GI Ch. 8 - What is the basic assumption underlying the gross...Ch. 8 - Prob. 10GI

Explain the terms cost, and market used in the LCM inventory valuation rule.

Concept explainers

Videos

Explain the terms cost, and market used in the LCM inventory valuation rule.

Explanation of Solution

Want to see more full solutions like this?

Chapter 8 Solutions