ek 6 HW - ConO Young Thug - Livin It Up (withezto.mheducation.com(3SavedHelpSave & ExitCheck myE7-13 (Algo) Reporting Inventory at Lower of Cost or Net Realizable Value LO7-4Sanchez Company was formed on January 1 of the current year and is preparing the annual financial statements dated December 31,current year. Ending inventory information about the four major items stocked for regular sale follows:ENDING INVENTORY, CURRENT YEARQuantityon HandNet RealizableValue (Market)Unit Cost WhenItemAcquired (FIFO)$ 15at Year-End25$ 20B604549406260153237Required:1. Compute the valuation that should be used for the current year ending inventory using lower of cost or net realizable value appliedon an item-by-item basis.2. What will be the effect of the write-down of inventory to lower of cost or net realizable value on cost of goods sold for the yearended December 31, current year?Complete this question by entering your answers in the tabs below.Renuired 1Required 2< Prev.9 of 9Next1°r M octly cloOudy

Item Quantity Total Cost Total NRV Lower of Cost or NRV A 25 $375 $500 $375 B 60 $2,700 $2,940…

Answered: 1. Compute the valuation that should be…

Business

Accounting

1. Compute the valuation that should be used for the current year ending in on an item-by-item basis.

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter6: Cost Of Goods Sold And Inventory

Section: Chapter Questions

Problem 50E: Inventory Costing Methods Crandall Distributors uses a perpetual inventory system and has the...

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Refer to the information for Morgan Inc. above. If Morgan uses a perpetual inventory system, what is the cost of ending inventory under FIFO at April 30? a. $32,500 b. $38,400 c. $63,600 d. $69,500
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Inventory Costing Methods Crandall Distributors uses a perpetual inventory system and has the following data available for inventory, purchases, and sales for a recent year. Required: 1. Compute the cost of ending inventory and the cost of goods sold using the specific identification method. Assume the ending inventory is made up of 40 units from beginning inventory, 30 units from Purchase 1, 80 units from Purchase 2, and 40 units from Purchase 3. 2. Compute the cost of ending inventory and cost of goods sold using the FIFO inventory costing method. 3. Compute the cost of ending inventory and cost of goods sold using the LIFO inventory costing method. 4. Compute the cost of ending inventory and cost of goods sold using the average cost inventory costing method. ( Note: Use four decimal places for per-unit calculations and round all other numbers to the nearest dollar.) 5. CONCEPTUAL CONNECTION Compare the ending inventory and cost of goods sold computed under all four methods. What can you conclude about the effects of the inventory costing methods on the balance sheet and the income statement?
RE7-8 Johnson Company uses a perpetual inventory system. On October 23, Johnson purchased 100,000 of inventory on credit with payment terms of 1/15, net 45. Using the net price method, prepare journal entries to record Johnsons purchases on October 23 and the subsequent payment on October 31. Using the information from RE7-8, prepare journal entries to record Johnsons purchase on October 23 and the subsequent payment on November 30.
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Inventory Write-Down Stiles Corporation uses the FIFO cost flow assumption and is in the process of applying the LCNRV rule for each of two products in its ending inventory. A profit margin of 30% on the selling price is considered normal for each product. Specific data for each product are as follows: Inventory Write-Down Use the information in E8-1. Assume that Stiles uses the LIFO cost flow assumption and is applying the LCM rule. Required: 1. What is the correct inventory value for each product? 2. Next Level With regard to requirement 1, what effect does the imposition of the constraints on market value have on the inventory valuations?
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On January 1 of Year 1, Dorso Company adopted the dollar-value LIFO method of inventory costing. Dorsos December 31 ending inventory records are as follows: Year 1: Current cost, 20,000; Index, 100 Year 2: Current cost, 33,600; Index, 120 Using the dollar-value LIFO method, compute Dorsos December 31 ending inventory for Year 2.