Palmquist Company has five different inventory items and applies the inventory valuation rules on an individual item basis. The normal markup on all items is 20% of cost. The following information is obtained from the company’s records:ItemUnitsCostReplacement CostNet Realizable Value1500$10.00$ 9.10$ 9.202400 8.00 8.10 7.803300 15.0013.5014.004200 18.0012.0017.005100 25.0025.5025.30Required:1. Assume that Palmquist uses the FIFO cost flow assumption. Compute the correct inventory value under the lower of cost or net realizable value rule. Round your answers to the nearest cent.

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Description: Palmquist Company has five different inventory items and applies the inventory valuation rules on an individual item basis. The normal markup on all items is 20% of cost. The following information is obtained from the company’s records:ItemUnitsCostR

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College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter13: Accounting For Merchandise Inventory

Section: Chapter Questions

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Palmquist Company has five different inventory items and applies the inventory valuation rules on an individual item basis. The normal markup on all items is 20% of cost. The following information is obtained from the company’s records:

Item	Units	Cost	Replacement Cost	Net Realizable Value
1	500	$10.00	$ 9.10	$ 9.20
2	400	8.00	8.10	7.80
3	300	15.00	13.50	14.00
4	200	18.00	12.00	17.00
5	100	25.00	25.50	25.30

Required:

1. Assume that Palmquist uses the FIFO cost flow assumption. Compute the correct inventory value under the lower of cost or net realizable value rule. Round your answers to the nearest cent.

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