Do not give image format E7-12 (Algo) Reporting Inventory at Lower of Cost or Net Realizable Value LO7-4H.T. Tan Company is preparing the annual financial statements dated December 31 of the current year. Ending inventory informationabout the five major items stocked for regular sale follows:ItemABCDEABсDE578717ENDING INVENTORY, CURRENT YEARUnit CostWhen AcquiredTotal NetItem Quantity Total Cost RealizableValue77357Quantityon Hand5787Total1777357Required:Compute the valuation that should be used for the current year ending inventory using lower of cost or net realizable value applied onan item-by-item basis.(FIFO)$ 2237553217Net RealizableValue (Market)at Year-EndLower ofCost orNRV$ 1947593712

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Description: Do not give image format E7-12 (Algo) Reporting Inventory at Lower of Cost or Net Realizable Value LO7-4H.T. Tan Company is preparing the annual financial statements dated December 31 of the current year. Ending inventory informationabout the five ma

As per IAS/IFRS 2 Inventory- valuationInventory is to be valued at lower of cost or net realizable…

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E7-12 (Algo) Reporting Inventory at Lower of Cost or Net Realizable Value LO7-4 H.T. Tan Company is preparing the annual financial statements dated December 31 of the current year. Ending inventory information about the five major items stocked for regular sale follows: Item A B C A B с D E D E ENDING INVENTORY, CURRENT YEAR Unit Cost When Acquired 57 87 17 77 357 Quantity on Hand 57 87 17 Total Net Item Quantity Total Cost Realizable Value Total 77 357 Required: Compute the valuation that should be used for the current year ending inventory using lower of cost or net realizable value applied on an item-by-item basis. (FIFO) $ 22 37 55 32 17 Net Realizable Value (Market) at Year-End Lower of Cost or NRV $19 47 59 37 12

E7-12 (Algo) Reporting Inventory at Lower of Cost or Net Realizable Value LO7-4 H.T. Tan Company is preparing the annual financial statements dated December 31 of the current year. Ending inventory information about the five major items stocked for regular sale follows: Item A B C A B с D E D E ENDING INVENTORY, CURRENT YEAR Unit Cost When Acquired 57 87 17 77 357 Quantity on Hand 57 87 17 Total Net Item Quantity Total Cost Realizable Value Total 77 357 Required: Compute the valuation that should be used for the current year ending inventory using lower of cost or net realizable value applied on an item-by-item basis. (FIFO) $ 22 37 55 32 17 Net Realizable Value (Market) at Year-End Lower of Cost or NRV $19 47 59 37 12

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter6: Cost Of Goods Sold And Inventory

Section: Chapter Questions

Problem 37BE: Lower of Cost or Market Garcia Company uses FIFO, and its inventory at the end of the year was...

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Refer to the information provided in RE8-4. If Paul Corporations inventory at January 1, 2019, had a cost and net realizable value of 300,000, prepare the journal entry to record the reductions to NRV for Paul Corporation assuming that Paul uses a periodic inventory system and the allowance method. Paul Corporation uses FIFO and reports the following inventory information: Assuming Paul uses a perpetual inventory system and the direct method, prepare the journal entry to record the write-down of inventory.
Refer to the information for Morgan Inc. above. If Morgan uses a perpetual inventory system, what is the cost of ending inventory under FIFO at April 30? a. $32,500 b. $38,400 c. $63,600 d. $69,500
RE7-8 Johnson Company uses a perpetual inventory system. On October 23, Johnson purchased 100,000 of inventory on credit with payment terms of 1/15, net 45. Using the net price method, prepare journal entries to record Johnsons purchases on October 23 and the subsequent payment on October 31. Using the information from RE7-8, prepare journal entries to record Johnsons purchase on October 23 and the subsequent payment on November 30.
Lower-of-cost-or market inventory Data on the physical inventory of Moyer Company as of December 31, 20Y9, are presented below. Quantity and cost data from the last purchases invoice of the year and the next-to-the-last purchases invoice are summarized as follows: Instructions Determine the inventory at cost and at the lower of cost or market, using the first-in, first-out method. Record the appropriate unit costs on an inventory sheet and complete the pricing of the inventory. When there are two different unit costs applicable to an item, proceed as follows: 1. Draw a line through the quantity, and insert the quantity and unit cost of the last purchase. 2. On the following line, insert the quantity and unit cost of the next-to-the-last purchase. 3. 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 below as an example.
On January 1 of Year 1, Dorso Company adopted the dollar-value LIFO method of inventory costing. Dorsos December 31 ending inventory records are as follows: Year 1: Current cost, 20,000; Index, 100 Year 2: Current cost, 33,600; Index, 120 Using the dollar-value LIFO method, compute Dorsos December 31 ending inventory for Year 2.
Lower of Cost or Market Garcia Company uses FIFO, and its inventory at the end of the year was recorded in the accounting records at $17,800. Due to technological changes in the market, Garcia would be able to replace its inventory for $16,500. Required: 1. Using the lower of cost or market method, what amount should Garcia report for inventory on its balance sheet at the end of the year? 2. Prepare the journal entry required to value the inventory at the lower of cost or market.
LIFO and Inventory Pools On January 1, 2016, Grover Company changed its inventory cost flow method to the LIFO cost method from the FIFO cost method for its raw materials inventory. It made the change for both financial statement and income tax reporting purposes. Grover uses the multiple-pools approach under which it groups substantially identical raw materials into LIFO inventory pools. It uses weighted average costs in valuing annual incremental layers. The composition of the December 31, 2018, inventory for the Class F inventory pool is as follows: Inventory transactions for the Class F inventory pool during 2019 were as follows: On March 2, 2019, 4,800 units were purchased at a unit cost of 13.50 for 64,800. On September 1, 2019, 7,200 units were purchased at a unit cost of 14.00 for 100,800. A total of 15,000 units were used for production during 2019. The following transactions for the Class F inventory pool took place during 2020: On January 11, 2020, 7,500 units were purchased at a unit cost of 14.50 for 108,750. On May 14, 2020, 5,500 units were purchased at a unit cost of 15.50 for 85,250. On December 29, 2020, 7,000 units were purchased at a unit cost of 16.00 for 112,000. A total of 16,000 units were used for production during 2020. Required: 1. Prepare a schedule to compute the inventory (units and dollar amounts) of the Class F inventory pool at December 31, 2019. Show supporting computations in good form. 2. Prepare a schedule to compute the cost of Class F raw materials used in production for the year ended December 31, 2019. 3. Prepare a schedule to compute the inventory (units and dollar amounts) of the Class F inventory pool at December 31, 2020. Show supporting computations in good form.
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