FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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atum Company has four products in its inventory. Information about ending inventory is as follows:
Product
Total Cost
101
$ 149,000
102
110,800
103
73,800
104
37,500
Total Replacement
Cost
$ 136,100
Total Net
Realizable Value
$ 123,700
104,600
49,200
135,400
35,000
62,100
62,800
he normal profit is 40% of total cost.
equired:
1. Determine the carrying value of inventory assuming the lower of cost or market (LCM) rule is applied to individual
products.
2. Assuming that inventory write-downs are common for Tatum Company, record any necessary year-end adjusting entry.
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Determine the carrying value of inventory assuming the lower of cost or market (LCM) rule is applied to individual products.
Product
Total Cost
Replacement
cost
NRV
NRV minus NP
Market
Inventory Value
101
$
149,000 $
136,100 $
123,700
102
110,800
104,600
135,400
103
73,800
49,200
62,100
104
37,500
35,000
62,800
Totals
$
371,100
< Required 1
Required 2 >
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Transcribed Image Text:atum Company has four products in its inventory. Information about ending inventory is as follows: Product Total Cost 101 $ 149,000 102 110,800 103 73,800 104 37,500 Total Replacement Cost $ 136,100 Total Net Realizable Value $ 123,700 104,600 49,200 135,400 35,000 62,100 62,800 he normal profit is 40% of total cost. equired: 1. Determine the carrying value of inventory assuming the lower of cost or market (LCM) rule is applied to individual products. 2. Assuming that inventory write-downs are common for Tatum Company, record any necessary year-end adjusting entry. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Determine the carrying value of inventory assuming the lower of cost or market (LCM) rule is applied to individual products. Product Total Cost Replacement cost NRV NRV minus NP Market Inventory Value 101 $ 149,000 $ 136,100 $ 123,700 102 110,800 104,600 135,400 103 73,800 49,200 62,100 104 37,500 35,000 62,800 Totals $ 371,100 < Required 1 Required 2 >
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