Question

Information about the ending inventory of the Madisen Company at December 31, 2017, has been provided...

Information about the ending inventory of the Madisen Company at December 31, 2017, has been provided to you by the company’s accounting personnel as follows:

Item

Quantity

Cost per Unit

Market Value per Unit

A

50

$10.00

$11.00

B

750

$3.00

$2.00

C

2,300

$5.00

$3.00

D

350

$16.00

$20.00

At what value will Madisen’s ending inventory be carried on the December 31, 2017 balance sheet under the lower of cost or market method applied to all inventory items together?

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Ans. Amounts are in $

Total Cost of Inventory

Item Quantity Cost per unit Total cost
A 50 $10 $500
B 750 $3 $2250
C 2300 $5 $11500
D 350 $16 $5600
Total cost for Inventory $19850

Now lets calculate the market value of all inventory

Items Quantity Market value per unit Total Market value
A 50 $11 $550
B 750 $2 $1500
C 2300 $3 $6900
D 350 $20 $7000
Total $15950

So From Above analysis we can see that market value of inventories are only $15950 as compared to cost of $19850.

Lower of cost or market value is market value in this case

December 31'2017 Inventory will be carried at $15950.

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
Sandals Company is preparing the annual financial statements dated December 31. Ending inventory information about the...
Sandals Company is preparing the annual financial statements dated December 31. Ending inventory information about the four major items stocked for regular sale follows:   Product Line Quantity on Hand Unit Cost When Acquire(FIFO) Market Value at Year-End   Air Flow 30 $ 15 $ 17   Blister Buster 90 34 32   Coolonite 32 70 65   Dudesly 25 24 29 Required: 1. Compute the amount that should be reported for the ending inventory using the LCM rule applied to each item. 2. How...
The December 31, 2017 inventory of Gwynn Company consisted of four products, for which certain information...
The December 31, 2017 inventory of Gwynn Company consisted of four products, for which certain information is provided below.                                                                                                                             Replacement           Estimated            Expected         Normal Profit Product        Original Cost                Cost                  Disposal Cost      Selling Price         on Sales       A                   $24.00                   $22.00                     $6.50                   $40.00                 20%     B                   $42.00                   $40.00                   $10.00                   $48.00                 25%     C                 $120.00                 $115.00                   $25.00                 $190.00                 30%     D                   $19.00                   $15.80                     $4.00                   $26.00                 10% Instructions:Using the lower-of-cost-or-net realizable value approach applied on an individual-item basis, compute the inventory valuation that should be reported for each product on December 31, 2017. Product COST NETREALIZABLE VALUE > LCNRV A B C D
The December 31, 2020 inventory of Sandhill Company consisted of four products, for which certain information...
The December 31, 2020 inventory of Sandhill Company consisted of four products, for which certain information is provided below. Product Original Cost Replacement Cost Estimated Disposal Cost Expected Selling Price Normal Profit on Sales A $30.00 $28.00 $5.00 $50.00 30.00% B $45.00 $43.00 $9.00 $49.00 25.00% C $148.00 $143.00 $28.00 $190.00 20.00% D $17.00 $14.50 $6.00 $28.00 20.00% Using the lower-of-cost-or-market approach applied on an individual-item basis, compute the inventory valuation that should be reported for each product on December...
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...
Sandals Company is preparing the annual financial statements dated December 31. Ending inventory is presently recorded...
Sandals Company is preparing the annual financial statements dated December 31. Ending inventory is presently recorded at its total cost of $10,250. Information about its inventory items follows: Product Line Quantity on Hand Unit Cost When Acquired (FIFO) Value at Year-End Air Flow 25 $ 90 $ 92 Blister Buster 15 80 76 Coolonite 70 20 13 Dudesly 60 90 96 Required: Compute the LCM/NRV write-down per unit and in total for each item in the table. Also compute the...
Sandals Company is preparing the annual financial statements dated December 31. Ending inventory is presently recorded...
Sandals Company is preparing the annual financial statements dated December 31. Ending inventory is presently recorded at its total cost of $7,500. Information about its inventory items follows: Product Line Quantity on Hand Unit Cost When Acquired (FIFO) Value at Year-End Air Flow 95 $ 25 $ 31 Blister Buster 15 70 65 Coolonite 15 45 43 Dudesly 85 40 48 1) . Compute the LCM/NRV write-down per unit and in total for each item in the table. Also compute...
he inventory of Metlock Company on December 31, 2017, consists of the following items. Part Quantity...
he inventory of Metlock Company on December 31, 2017, consists of the following items. Part Quantity Cost per Unit Net Realizable Value 110 580 $111 $117 111 910 70 61 112 540 94 89 113 190 199 211 120 400 240 243 121 a 1,600 19 1 122 270 281 275 a Part No. 121 is obsolete and has a realizable value of $1 each as scrap. (a) Determine the inventory as of December 31, 2017, by the LCNRV method,...
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...
The inventory of Oheto Company on December 31, 2020, consists of the following items. Part Quantity...
The inventory of Oheto Company on December 31, 2020, consists of the following items. Part Quantity Cost per Unit Net Realizable Value 110 600 $95.00 $100.00 111 1,000 60.00 52.00 112 500 80 76.00 113 200 170 180.00 120 400 205.00 208.00 121 a 1,600 16.00 1.00 122 300 240 235.00 a Part No. 121 is obsolete and has a realizable value of $1.00 each as scrap. (a) Determine the inventory as of December 31, 2020, by the LCNRV method,...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT