Lower-of-cost-or-market inventory Data on the physical inventory of Ashwood Products Company as of December 31 follows: Description Inventory Quantity Market Value per Unit (Net Realizable Value) B12 38 $ 57 E41 18 180 G19 33 126 L88 18 550 N94 400 7 P24 90 18 R66 8 250 T33 140 20 Z16 15 752 Quantity and cost data from the last purchases invoice of the year and the next-to-the-last purchases invoice are summarized as follows: Last Purchases Invoice Next-to-the-Last Purchases Invoice Description Quantity Purchased Unit Cost Quantity Purchased Unit Cost B12 30 $ 60 30 $ 59 E41 35 178 20 180 G19 20 128 25 129 L88 10 563 10 560 N94 500 8 500 7 P24 80 22 50 21 R66 5 248 4 260 T33 100 21 100 19 Z16 10 750 9 745 Instructions Determine the inventory at cost and also at the lower of cost or market, using the first-in, first-out method. Record the appropriate unit costs on the 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 as an example. Inventory Sheet December 31 Description Inventory Quantity Cost per Unit Market Value per Unit (Net Realizable Value) Total Cost Market LCM B12 38.30 $60 $57 $1,800 $1,710 8 59 57 472 456 $2,272 $2,166 $2,166

BuyFind

Financial & Managerial Accounting

14th Edition
Carl Warren + 2 others
Publisher: Cengage Learning
ISBN: 9781337119207
BuyFind

Financial & Managerial Accounting

14th Edition
Carl Warren + 2 others
Publisher: Cengage Learning
ISBN: 9781337119207

Solutions

Chapter
Section
Chapter 6, Problem 6.6APR
Textbook Problem

Lower-of-cost-or-market inventory

Data on the physical inventory of Ashwood Products Company as of December 31 follows:

Description Inventory Quantity Market Value per Unit (Net Realizable Value)
B12 38 $ 57
E41 18 180
G19 33 126
L88 18 550
N94 400 7
P24 90 18
R66 8 250
T33 140 20
Z16 15 752

Quantity and cost data from the last purchases invoice of the year and the next-to-the-last purchases invoice are summarized as follows:

Last Purchases Invoice Next-to-the-Last Purchases Invoice
Description Quantity Purchased Unit Cost Quantity Purchased Unit Cost
B12 30 $ 60 30 $ 59
E41 35 178 20 180
G19 20 128 25 129
L88 10 563 10 560
N94 500 8 500 7
P24 80 22 50 21
R66 5 248 4 260
T33 100 21 100 19
Z16 10 750 9 745

Instructions

Determine the inventory at cost and also at the lower of cost or market, using the first-in, first-out method. Record the appropriate unit costs on the 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 as an example.

      Inventory Sheet December 31      
Description Inventory Quantity Cost per Unit Market Value per Unit (Net Realizable Value) Total
Cost Market LCM
B12 38.30 $60 $57 $1,800 $1,710
8 59 57 472 456
$2,272 $2,166 $2,166

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Chapter 6 Solutions

Financial & Managerial Accounting
Ch. 6 - Cost flow methods The following three identical...Ch. 6 - Perpetual inventory using FIFO Beginning...Ch. 6 - Perpetual inventory using LIFO Beginning...Ch. 6 - Perpetual inventory using weighted average...Ch. 6 - Periodic inventory using FIFO, UFO, and weighted...Ch. 6 - Lower-of-cost-or-market method On the basis of the...Ch. 6 - Effect of inventory errors During the taking of...Ch. 6 - Control of inventories Triple Creek Hardware Store...Ch. 6 - Control of inventories Hardcase Luggage Shop is a...Ch. 6 - Perpetual inventory using FIFO Beginning...Ch. 6 - Perpetual inventory using LIFO Assume that the...Ch. 6 - Perpetual inventory using LIFO Beginning...Ch. 6 - Perpetual inventory using FIFO Assume that the...Ch. 6 - FIFO and UFO costs under perpetual inventory...Ch. 6 - Weighted average cost flow method under perpetual...Ch. 6 - Weighted average cost flow method under perpetual...Ch. 6 - Perpetual inventory using FIFO Assume that the...Ch. 6 - Perpetual inventory using LIFO Assume that the...Ch. 6 - Periodic inventory by three methods The units of...Ch. 6 - Periodic inventory by three methods; cost of goods...Ch. 6 - Comparing inventory methods Assume that a firm...Ch. 6 - Lower-of-cost-or-market inventory On the basis of...Ch. 6 - Inventory on the balance sheet Based on the data...Ch. 6 - Effect of errors n physical inventory Madison...Ch. 6 - Effect of errors in physical inventory Fonda...Ch. 6 - Error in inventory During 20Y5, the accountant...Ch. 6 - Retail method A business using the retail method...Ch. 6 - Retail method A business using the retail method...Ch. 6 - Retail method A business using the retail method...Ch. 6 - Retail method On the basis of the following data,...Ch. 6 - Gross profit method The inventory was destroyed by...Ch. 6 - Gross profit method Based on the following data,...Ch. 6 - Gross profit method Based on the following data,...Ch. 6 - FIFO perpetual inventory The beginning inventory...Ch. 6 - LIFO perpetual inventory The beginning inventory...Ch. 6 - Weighted average cost method with perpetual...Ch. 6 - Periodic inventory by three methods The beginning...Ch. 6 - Periodic inventory by three methods Dymac...Ch. 6 - Lower-of-cost-or-market inventory Data on the...Ch. 6 - Retail method; gross profit method Selected data...Ch. 6 - FIFO perpetual inventory The beginning inventory...Ch. 6 - LIFO perpetual inventory The beginning inventory...Ch. 6 - Weighted average cost method with perpetual...Ch. 6 - Periodic inventory by three methods The beginning...Ch. 6 - Periodic inventory by three methods Pappas...Ch. 6 - Lower-of-cost-or-market inventory Data on the...Ch. 6 - Retail method; gross profit method Selected data...Ch. 6 - Continuing Company AnalysisAmazon: Inventory...Ch. 6 - Costco, Walmart, Nordstrom: Inventory turnover and...Ch. 6 - Monster Beverage and Brown-Forman: Inventory...Ch. 6 - Hewlett-Packard and Apple: Inventory turnover and...Ch. 6 - Ethics in Action Sizemo Elektroniks sells...Ch. 6 - Communication Golden Eagle Company began...

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