Inventory Stiles Corporation uses the LIFO cost flow assumption and is in the process of applying the LCM rule for each of two products in its ending inventory. A profit margin of 30% on the selling price is considered normal for each product. Specific data for each product are as follows: Write-Down Historical cost Replacement cost Estimated cost of disposal Estimated selling price Product A Product B $80 $96 70 98 32 30 150 120 Required: 1. What is the correct inventory value for each product? Product A per unit Product B per unit 2. Next Level with regard to requirement 1, what effect does the imposition of the constraints on market value have on the inventory valuations? For Product A, For Product B,
Inventory Stiles Corporation uses the LIFO cost flow assumption and is in the process of applying the LCM rule for each of two products in its ending inventory. A profit margin of 30% on the selling price is considered normal for each product. Specific data for each product are as follows: Write-Down Historical cost Replacement cost Estimated cost of disposal Estimated selling price Product A Product B $80 $96 70 98 32 30 150 120 Required: 1. What is the correct inventory value for each product? Product A per unit Product B per unit 2. Next Level with regard to requirement 1, what effect does the imposition of the constraints on market value have on the inventory valuations? For Product A, For Product B,
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter8: Inventories: Special Valuation Issues
Section: Chapter Questions
Problem 2E: Inventory Write-Down Stiles Corporation uses the FIFO cost flow assumption and is in the process of...
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