A company's normal selling price for its product is $29 per unit. However, due to marketcompetition, the selling price has fallen to $24 per unit. This company's current Inventoryconsists of 110 units purchased at $25 per unit. Replacement cost has fallen to $22 per unit.Calculate the value of this company's Inventory at the lower of cost or market.a. $2,520.b. $2,750.c. $2,640.d. $2,420.e. $2,370.

Lower of Market - $24 or Cost - $22 Cost of Inventory = No. of Units x Lower of Cost or Market…

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SWFT Individual Income Taxes

43rd Edition

ISBN:9780357391365

Author:YOUNG

Publisher:YOUNG

Chapter18: Accounting Periods And Methods

Section: Chapter Questions

Problem 67P

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Black Corporation uses the LIFO cost flow assumption. Each unit of its inventory has a net realizable value of 300, a normal profit margin of 35, and a current replacement cost of 250. Determine the amount per unit that should be used as the market value to apply the lower of cost or market rule to determine Blacks ending inventory.
Sienna Company uses the FIFO cost flow assumption. Sierra has inventory with a selling price of 100, packaging costs of 5, and transportation costs of 10. Siennas normal profit margin is 20. However, due to limited supply of the product from the manufacturer, it would cost Sienna 80 to replace the inventory. What amount should be used as the market value? a. 65 b. 80 c. 85 d. 100
The following information is available for Cooke Company for the current year: The gross margin is 40% of net sales. What is the cost of goods available for sale? a. 5840,000 b. 960,000 c. 1,200,000 d. 1,220,000
When prices are falling (deflation), which costing method would produce the highest gross margin for the following? Choose first-in, first-out (FIFO); last-in, first-out (LIFO); or weighted average, assuming that B62 Company had the following transactions for the month. Calculate the gross margin for each of the following cost allocation methods, assuming B62 sold just one unit of these goods for $400. Provide your calculations. A. first-in, first-out (FIFO) B. last-in, first-out (LIFO) C. weighted average (AVG)
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A company’s normal selling price for its product is $21 per unit. However, due to market competition, the selling price has fallen to $16 per unit. This company's current FIFO inventory consists of 190 units purchased at $17 per unit. Net realizable value has fallen to $14 per unit. Calculate the value of this company's inventory at the lower of cost or market.
A company's normal selling price for its product is $26 per unit. However, due to market competition, the selling price has fallen to $21 per unit. This company's current FIFO inventory consists of 260 units purchased at $22 per unit. Net realizable value has fallen to $19 per unit. Calculate the value of this company's inventory at the lower of cost or market. Multiple Choice $4,890. $5,720. $5,040. $5,460. $4.940.
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A company normally sells it products for $20 per unit, which includes a profit margin of 25%. However, theselling price has fallen to $15 per unit. This company's current inventory consists 200 units purchased at $16per unit. Replacement cost has now fallen to $13 per unit. Calculate the value of inventory at the lower ofcost or market.a. $2,550.b. $2,600.c. $2,700.d. $3,000.e. $3,200.
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A company's normal selling price for its product is $30 per unit. However, due to market competition, the selling price has fallen to $25 per unit. This company's current FIFO Inventory consists. of 300 units purchased at $26 per unit. Net realizable value has fallen to $23 per unit. Calculate the value of this company's inventory at the lower of cost or market. Multiple Choice $6,900. $7,500. $6,850. $7,800. $7,000. MacBook Air

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