SLR Corporation has 1,000 units of each of its two products in its year-end inventory. Per unit data for each of the products are as follows:     Product 1 Product 2 Cost $50 $34 Replacement cost $48 $26 Selling price $70 $36 Selling costs $6 $4 Normal profit $10 $8 Determine the carrying value of SLR’s inventory assuming that the lower of cost or market (LCM) rule is applied to individual products. What is the before-tax income effect of the LCM adjustment?     Product Cost Market Per Unit Inventory Value Unit Cost Lower of Cost or Market 1       1,000     2       1,000   26,000       Cost           Inventory value   What is the before-tax income effect of the LCM adjustment? (higher by/lower by/no effect) _______ (amount)

Q: What is this?

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Q: SLR Corporation has 2,500 units of each of its two products in its year-end inventory. Per unit data…

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A:

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Q: effect of the LCNRV

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Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.