On the basis of the following data, determine the value of the inventory at the lower of cost or market. Assemble the data in ti form illustrated in Exhibit 9. Inventory Inventory Cost per Market Value per Unit Item Quantity Unit (Net Realizable Value) Birch 46 $171 $179 Cypress 23 141 161 Mountain Ash 39 72 70 Spruce 38 187 168 Willow 25 191 170 Inventory at the Lower of Cost or Market Inventory Item Total Cost Total Market Total Lower of C or M Birch Cypress Mountain Ash Spruce Willow Total

On the basis of the following data, determine the value of the inventory at the lower of cost or market. Assemble the data in ti form illustrated in Exhibit 9. Inventory Inventory Cost per Market Value per Unit Item Quantity Unit (Net Realizable Value) Birch 46 $171 $179 Cypress 23 141 161 Mountain Ash 39 72 70 Spruce 38 187 168 Willow 25 191 170 Inventory at the Lower of Cost or Market Inventory Item Total Cost Total Market Total Lower of C or M Birch Cypress Mountain Ash Spruce Willow Total

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 26CE: Lower of Cost or Market The accountant for Murphy Company prepared the following analysis of its...

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Inventory Valuation Specific identification method Weighted average cost method FIFO method LIFO method LIFO liquidation LIFO conformity rule LIFO reserve Replacement cost Inventory profit Lower-of-cost-or-market (LCM) rule Inventory turnover ratio Number of days sales in inventory Moving average (Appendix) The name given to an average cost method when a weighted average cost assumption is used with a perpetual inventory system. An inventory costing method that assigns the same unit cost to all units available for sale during the period. A conservative inventory valuation approach that is an attempt to anticipate declines in the value of inventory before its actual sale. An inventory costing method that assigns the most recent costs to ending inventory. The current cost of a unit of inventory. An inventory costing method that assigns the most recent costs to cost of goods sold. A measure of how long it takes to sell inventory. The IRS requirement that when LIFO is used on a tax return, it must also be used in reporting income to stockholders. An inventory costing method that relies on matching unit costs with the actual units sold. The portion of the gross profit that results from holding inventory during a period of rising prices. The result of selling more units than are purchased during the period, which can have negative tax consequences if a company is using LIFO. The excess of the value of a companys inventory stated at FIFO over the value stated at LIFO. A measure of the number of times inventory is sold during the period.
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