Question

Blossom Company uses the lower-of-cost-or-market basis for its inventory. The following data are available at December...

Blossom Company uses the lower-of-cost-or-market basis for its inventory. The following data are available at December 31.

Units

Cost
per Unit

Market
per Unit
Cameras
   Minolta 5 $161 $159
   Canon 8 131 160
Light Meters
   Vivitar 12 120 106
   Kodak 9 112 145



What amount should be reported on Blossom Company’s financial statements, assuming the lower-of-cost-or-market rule is applied?

Total $enter a total amount in dollars
Business   Accounting   
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Homework Answers

Answer #1
Units Cost per Unit market per unit cost of inventory market value of inventory item wise category wise whole wise
Cameras
Minolta 5 161 159 805 795 795
Canon 8 131 160 1048 1280 1048
1853 2075 1843 1853
Light Meters
Vuvitar 12 120 106 1440 1272 1272
Kodak 9 112 145 1008 1305 1008
2448 2577 2280 2448
Grand total 4301 4652 4123 4301 4301

In item wise each sub product is considered. e.g. for Minolta cost is 805 and market value is 795 lower of both selected is 795. final answer is 4123.

In category wise total cost of both sub products is compared. final answer is 4301.

In whole wise cameras and light meters is compared and final answer is 4301  

Company may use any of the above method as feasible.   

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