Question

SLR Corporation has 1,200 units of each of its two products in its year-end inventory. Per...

SLR Corporation has 1,200 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 $ 59 $ 43
Replacement cost 57 35
Selling price 79 45
Selling costs 15 7
Normal profit margin 19 11


Determine the balance sheet 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?

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Forester Company has five products in its inventory. Information about the December 31, 2021, inventory follows....
Forester Company has five products in its inventory. Information about the December 31, 2021, inventory follows. Product Quantity Unit Cost Unit Replacement Cost Unit Selling Price A 700 $ 21 $ 23 $ 27 B 1,000 26 22 29 C 900 14 13 19 D 600 18 15 17 E 500 25 23 24 The cost to sell for each product consists of a 20 percent sales commission. The normal profit for each product is 40 percent of the selling...
Forest Company has five products in its inventory. Information about the December 31, 2021, inventory follows....
Forest Company has five products in its inventory. Information about the December 31, 2021, inventory follows. Product Quantity Unit Cost Unit Replacement Cost Unit Selling Price A 1,000 $10 $12 $16 B 800 $15 $11 $18 C 600 $3 $2 $8 D 200 $7 $4 $6 E 600 $14 $12 $13 The cost to sell for each product consists of a 15 percent sales commission. The normal profit for each product is 40 percent of the selling price. The carrying...
Beerbo follows the lower-of-cost-or-market (LCM) rule to value its inventory.  All of Beerbo's products have a 10%...
Beerbo follows the lower-of-cost-or-market (LCM) rule to value its inventory.  All of Beerbo's products have a 10% profit margin on selling price. Per unit information about Beerbo Inc.'s inventory of products is as follows: A B C D E Historical cost $80 $100 $50 $90 $95 Replacement cost $88 $90 $45 $36 $105 Estimated selling price $140 $130 $80 $100 $120 Estimated cost to complete $15 $22 $40 $19 $11 Estimated cost to dispose / sell $5 $8 $0 $9 $17...
Tatum Company has four products in its inventory. Information about the December 31, 2018, inventory is...
Tatum Company has four products in its inventory. Information about the December 31, 2018, inventory is as follows: Product Total Cost Total Replacement Cost Total Net Realizable Value 101 $ 146,000 $ 133,400 $ 121,200 102 108,600 102,500 132,700 103 72,300 48,200 60,800 104 36,700 34,300 61,500 The normal gross profit percentage is 35% of total cost. Required: 1. Determine the carrying value of inventory at December 31, 2018, assuming the lower of cost or market (LCM) rule is applied...
Crane Corporation has two products in its ending inventory, each accounted for at the lower of...
Crane Corporation has two products in its ending inventory, each accounted for at the lower of cost or market. A profit margin of 30% on selling price is considered normal for each product. Specific data with respect to each product follows: Product #1 Product #2 Historical cost $8 $19 Replacement cost 10 13 Estimated cost to dispose 3 8 Estimated selling price 18 31 In pricing its ending inventory using the lower-of-cost-or-market, what unit values should Crane use for products...
Pharoah Corporation has two products in its ending inventory, each accounted for at the lower of...
Pharoah Corporation has two products in its ending inventory, each accounted for at the lower of cost or market. A profit margin of 25% on selling price is considered normal for each product. Specific data with respect to each product follows: Product #1 Product #2 Historical cost $10 $19 Replacement cost 8 12 Estimated cost to dispose 7 9 Estimated selling price 20 32 In pricing its ending inventory using the lower-of-cost-or-market, what unit values, rounded to the nearest dollar,...
Daniel Corporation has two products in its ending inventory, each accounted for at the lower of...
Daniel Corporation has two products in its ending inventory, each accounted for at the lower of cost or market. A profit margin of 30% on selling price is considered normal for each product. Specific data with respect to each product follows:                                                                       Product #1          Product #2 Historical cost                                                  $25.00              $ 31.00 Replacement cost                                                22.50                  27.00 Estimated cost to dispose                                     5.00                  13.00 Estimated selling price                                        40.00                  65.00 In pricing its ending inventory using the lower-of-cost-or-market, what unit values should Oslo use...
Multiple Choice Question 68 Cullumber Corporation has two products in its ending inventory, each accounted for...
Multiple Choice Question 68 Cullumber Corporation has two products in its ending inventory, each accounted for at the lower of cost or market. A profit margin of 20% on selling price is considered normal for each product. Specific data with respect to each product follows: Product #1 Product #2 Historical cost $8 $16 Replacement cost 9 15 Estimated cost to dispose 4 8 Estimated selling price 19 33 In pricing its ending inventory using the lower-of-cost-or-market, what unit values should...
Jones Corporation has the following information of inventory at 12/31/2017 This is the first business year...
Jones Corporation has the following information of inventory at 12/31/2017 This is the first business year of the company. Jones Corporation uses the Lower-of-Cost-or-Market (LCM) method, on an individual-item basis, in pricing its inventory items. The inventory at December 31, 2017, consists of products G, H, I, J, K, L, M and N. Relevant per unit data for these products appear below. Item No. Cost per unit Cost to Replace Estimated Selling Price Cost of Completion and Disposal Normal Profit...
The inventory of Royal Decking consisted of five products. Information about the December 31, 2018, inventory...
The inventory of Royal Decking consisted of five products. Information about the December 31, 2018, inventory is as follows: Per Unit Product Cost Replacement Cost Selling Price A $ 56 $ 51 $ 76 B 96 86 116 C 56 71 96 D 116 86 146 E 36 44 46 Selling costs consist of a sales commission equal to 10% of selling price and shipping costs equal to 5% of cost. The normal gross profit percentage is 35% of selling...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT