Question

A physical inventory of Liverpool Company taken at December 31 reveals the following. Per Unit Item Units Cost Market Car audio equipment Speakers 340 $ 95 $ 103 Stereos 255 116 105 Amplifiers 321 91 100 Subwoofers 199 57 46 Security equipment Alarms 475 155 130 Locks 286 98 89 Cameras 207 315 327 Binocular equipment Tripods 180 75 89 Stabilizers 165 102 110 Required: 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.

Answer 1