Question

Lower-of-Cost-or-Market (LCM) Method The following data are taken from the Smith & Wesson Corporation's inventory accounts:...

Lower-of-Cost-or-Market (LCM) Method The following data are taken from the Smith & Wesson Corporation's inventory accounts: Item Code Quantity Unit Cost Replacement Cost ZXE 100 $42 $40 XYF 300 53 54 MNJ 400 42 40 UBS 200 53 57 Calculate the value of the company's ending inventory using the lower-of-cost-or-market method applied to each item of inventory.

Homework Answers

Answer #1

Valuation of the company's ending inventory using the lower-of-cost-or-market method

Item code Quantity Unit cost Replacement cost Valuation base Value of inventory
ZXE 100 42 40 Replacement cost 4,000
XYF 300 53 54 Unit cost 15,900
MNJ 400 42 40 Replacement cost 16,000
UBS 200 53 57 Unit cost 10,600
$46,500

Hence, value of ending inventory = $46,500

Kindly give a positive rating if you are satisfied with the answer. Feel free to ask if you have any doubts. Thanks.

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Exercise 5-10 Lower of cost or market LO P2 Martinez Company's ending inventory includes the following...
Exercise 5-10 Lower of cost or market LO P2 Martinez Company's ending inventory includes the following items. Product Units Cost per Unit Market per Unit Helmets 39 $ 61 $ 57 Bats 32 79 85 Shoes 53 98 102 Uniforms 57 43 43    Compute the lower of cost or market for ending inventory applied separately to each product.   
Lower-of-Cost-or-Market Method On the basis of the following data, determine the value of the inventory at...
Lower-of-Cost-or-Market Method On the basis of the following data, determine the value of the inventory at the lower-of-cost-or-market by applying lower-of-cost-or-market to each inventory item, as shown in Exhibit 9. Item Inventory Quantity Cost per Unit Market Value per Unit (Net Realizable Value) JFW1 82 $32 $28 SAW9 167 16 18 $
Problem 6-5A Lower of cost or market LO P2 A physical inventory of Liverpool Company taken...
Problem 6-5A Lower of cost or market LO P2 A physical inventory of Liverpool Company taken at December 31 reveals the following.       Per Unit Item Units Cost Market Car audio equipment Speakers 354 $ 109 $ 117 Stereos 269 130 120 Amplifiers 335 105 114 Subwoofers 213 71 61 Security equipment Alarms 489 169 159 Locks 300 112 102 Cameras 221 331 341 Binocular equipment Tripods 194 93 103 Stabilizers 179 114 124 Required: 1. Calculate the lower of...
Lower-of-Cost-or-Market Inventory On the basis of the following data, determine the value of the inventory at...
Lower-of-Cost-or-Market Inventory On the basis of the following data, determine the value of the inventory at the lower of cost or market. Assemble the data in the form illustrated in Exhibit 10. Product Inventory Quantity Cost Per Unit Market Value per Unit (Net Realizable Value) Class 1: Model A 33 $262 $247 Model B 46   215 210 Model C 43 134   149 Class 2: Model D 36   183   158 Model E 42 240 226 a. Determine the value of the...
Lower-of-Cost-or-Market Inventory On the basis of the following data, determine the value of the inventory at...
Lower-of-Cost-or-Market Inventory On the basis of the following data, determine the value of the inventory at the lower of cost or market. Assemble the data in the form illustrated in Exhibit 10. Product Inventory Quantity Cost Per Unit Market Value per Unit (Net Realizable Value) Class 1: Model A 18 $108 $84 Model B 21   88 85 Model C 47 201   196 Class 2: Model D 17   67   48 Model E 28 210 185 a. Determine the value of the...
1. Calculate the lower of cost or market for the inventory applied separately to each item....
1. Calculate the lower of cost or market for the inventory applied separately to each item. 2. If the market amount is less than the recorded cost of the inventory, then record the LCM adjustment to the Merchandise Inventory account. A physical inventory of Liverpool Company taken at December 31 reveals the following.       Per Unit Item Units Cost Market Car audio equipment Speakers 354 $ 109 $ 117 Stereos 269 130 120 Amplifiers 335 105 114 Subwoofers 213 71...
Lower-of-Cost-or-Market Inventory Data on the physical inventory of Ashwood Products Company as of December 31 follow:...
Lower-of-Cost-or-Market Inventory Data on the physical inventory of Ashwood Products Company as of December 31 follow: Description Inventory Quantity Unit Market Price 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...
Lower-of-Cost-or-Market Inventory On the basis of the following data, determine the value of the inventory at...
Lower-of-Cost-or-Market Inventory On the basis of the following data, determine the value of the inventory at the lower of cost or market. Total Product Inventory Quantity Cost per Unit Market Value per Unit (Net Realizable Value) Cost Market LCM Adams 100 $140 $125 $_____ $_____ $______ Coolidge 375 90 112 ______ ______ ______ McKinley 220 60 59 ______ ______ ______ Garfield 900 120 115 ______ ______ ______ Lincoln 626 140 145 ______ ______ ______ Total $_____ $_____ $______
Determining Lower of Cost or Net Realizable Value (NRV) The following data refer to Froning Company’s...
Determining Lower of Cost or Net Realizable Value (NRV) The following data refer to Froning Company’s ending inventory. Item Code Quantity Unit Cost Unit NRV LXC 500 $45 $48 KWT 180 38 34 MOR 300 22 20 NES 200 27 32 Determine the ending inventory amount by applying the lower of cost or net realizable value rule to: (a) each item of inventory $Answer (b) the total inventory. $Answer
On the basis of the following data, determine the value of the inventory at the lower-of-cost-or-market...
On the basis of the following data, determine the value of the inventory at the lower-of-cost-or-market by applying lower-of-cost-or-market to each inventory item, as shown in Exhibit 10. Item Inventory Quantity Unit Cost Price Unit Market Price MX62 116 $31 $26 BJ54 225 16 18 $_____