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Lower-of-cost-or-market inventory Data on the physical inventory of Katus Products Co. as of December 31 follow: Inventory Item Inventory Quantity Market Value per Unit (Net Realizable Value) A54 37 $ 56 C77 24 178 F66 30 132 H83 21 545 K12 375 5 Q58 90 18 S36 8 235 V97 140 20 Y88 17 744 Quantity and cost data from the last purchases invoice of the year and the next-to-the-last purchases invoice are summarized as follows: Instructions Determine the inventory at cost as well as 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: 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.

BuyFind

Accounting

27th Edition
WARREN + 5 others
Publisher: Cengage Learning,
ISBN: 9781337272094
BuyFind

Accounting

27th Edition
WARREN + 5 others
Publisher: Cengage Learning,
ISBN: 9781337272094

Solutions

Chapter
Section
Chapter 7, Problem 7.6BPR
Textbook Problem

Lower-of-cost-or-market inventory

Data on the physical inventory of Katus Products Co. as of December 31 follow:

Inventory Item Inventory Quantity Market Value per Unit (Net Realizable Value)
A54 37 $ 56
C77 24 178
F66 30 132
H83 21 545
K12 375 5
Q58 90 18
S36 8 235
V97 140 20
Y88 17 744

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

Chapter 7, Problem 7.6BPR, Lower-of-cost-or-market inventory Data on the physical inventory of Katus Products Co. as of , example  1

Instructions

Determine the inventory at cost as well as 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:

  1. 1. Draw a line through the quantity and insert the quantity and unit cost of the last purchase.
  2. 2. On the following line, insert the quantity and unit cost of the next-to-the-last purchase.
  3. 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.

Chapter 7, Problem 7.6BPR, Lower-of-cost-or-market inventory Data on the physical inventory of Katus Products Co. as of , example  2

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Chapter 7 Solutions

Accounting
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