Financial Accounting
14th Edition
ISBN: 9781305088436
Author: Carl Warren, Jim Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Question
Chapter 7, Problem 15E
To determine
Calculate the value of inventory based on lower of cost or market price.
Expert Solution & Answer
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Check out a sample textbook solutionStudents have asked these similar questions
Fill in the table.
Determine the cost assigned to ending inventory and to cost of goods sold using weighted average.
Based on the attached picture using the
weighted average method determine:
A) What are the costs per equivalent units?
B) What is the value of the inventory transferred out?
C) What is the value of the ending inventory ?
On the basis of the following data, determine the value of the inventory at the lower of cost or market. Assemble the data in the form illustrated in Exhibit 10.
Product
Class 1:
Model A
Model B
Model C
Class 2:
Model D
Model E
Product
Model A
Model B
Model C
Model D
Model E
Total
Product
Class 1:
Model A
Model B
Model C
Class 2:
Total
Subtotal
Model D
Model E
Inventory
Quantity
Total
26
a. Determine the value of the inventory at the lower of cost or market applied to each item in the Inventory.
Subtotal
Product
Model A
Model B
Model C
Model D
Model E
26
10
49
9
b. Determine the value of the inventory at the lower of cost or market applied to each class of inventory.
Cost Per
Unit
Inventory
Quantity
Inventory at the Lower of Cost or Market
Market Value
per Unit
Inventory Cost
Quantity per Unit (Net Realizable Value)
Cost
per Unit
$149
284
147
54
121
00000
Market Value per Unit
(Net Realizable Value)
88
38
00000
$137
274
143
46
Inventory at the
Lower of Cost
or Market
Market Value
per…
Chapter 7 Solutions
Financial Accounting
Ch. 7 - Prob. 1DQCh. 7 - Why is it important to take a physical inventory...Ch. 7 - Do the terms FIFO, LIFO, and weighted average...Ch. 7 - If merchandise inventory is being valued at cost...Ch. 7 - Which of the three methods of inventory...Ch. 7 - If inventory is being valued at cost and the price...Ch. 7 - Using the following data, how should the...Ch. 7 - The inventory at the end of the year was...Ch. 7 - Hutch Co. sold merchandise to Bibbins Company on...Ch. 7 - A manufacturer shipped merchandise to a retailer...
Ch. 7 - The following three identical units of Item BZ1810...Ch. 7 - The following three identical units of Item Beta...Ch. 7 - Beginning inventory, purchases, and sales for Item...Ch. 7 - Beginning inventory, purchases, and sales for Item...Ch. 7 - Beginning inventory, purchases, and sales for Item...Ch. 7 - Beginning inventory, purchases, and sales for Item...Ch. 7 - Beginning inventory, purchases, and sales for 30xT...Ch. 7 - Beginning inventory, purchases, and sales for...Ch. 7 - The units of an item available for sale during the...Ch. 7 - Prob. 5PEBCh. 7 - On the basis of the following data, determine the...Ch. 7 - Prob. 6PEBCh. 7 - Prob. 7PEACh. 7 - During the taking of its physical inventory on...Ch. 7 - Financial statement data for years ending December...Ch. 7 - Financial statement data for years ending December...Ch. 7 - Triple Creek Hardware Store currently uses a...Ch. 7 - Hardcase Luggage Shop is a small retail...Ch. 7 - Prob. 3ECh. 7 - Assume that the business in Exercise 7-3 maintains...Ch. 7 - Beginning inventory, purchases, and sales data for...Ch. 7 - Assume that the business in Exercise 7-5 maintains...Ch. 7 - The following units of an item were available for...Ch. 7 - Prob. 8ECh. 7 - The following units of a particular item were...Ch. 7 - Assume that the business in Exercise 7-9 maintains...Ch. 7 - Assume that the business in Exercise 7-9 maintains...Ch. 7 - Prob. 12ECh. 7 - Prob. 13ECh. 7 - Assume that a firm separately determined inventory...Ch. 7 - Prob. 15ECh. 7 - Based on the data in Exercise 7-15 and assuming...Ch. 7 - Missouri River Supply Co. sells canoes, kayaks,...Ch. 7 - Fonda Motorcycle Shop sells motorcycles, ATVs, and...Ch. 7 - During 2016, the accountant discovered that the...Ch. 7 - The following data (in thousands) were taken from...Ch. 7 - Kroger, Safeway Inc., and Whole Foods Markets,...Ch. 7 - A business using the retail method of inventory...Ch. 7 - A business using the retail method of inventory...Ch. 7 - A business using the retail method of inventory...Ch. 7 - On the basis of the following data, estimate the...Ch. 7 - The merchandise inventory was destroyed by fire on...Ch. 7 - Based on the following data, estimate the cost of...Ch. 7 - Based on the following data, estimate the cost of...Ch. 7 - The beginning inventory at Funky Party Supplies...Ch. 7 - The beginning inventory at Funky Party Supplies...Ch. 7 - The beginning inventory for Funky Party Supplies...Ch. 7 - The beginning inventory for Funky Party Supplies...Ch. 7 - Prob. 5PACh. 7 - Data on the physical inventory of Ashwood Products...Ch. 7 - Selected data on merchandise inventory, purchases,...Ch. 7 - The beginning inventory of merchandise at Dunne...Ch. 7 - The beginning inventory for Dunne Co. and data on...Ch. 7 - The beginning inventory for Dunne Co. and data on...Ch. 7 - The beginning inventory for Dunne Co. and data on...Ch. 7 - Pappas Appliances uses the periodic inventory...Ch. 7 - Data on the physical inventory of Katus Products...Ch. 7 - Selected data on merchandise inventory, purchases,...Ch. 7 - Anstead Co. is experiencing a decrease in sales...Ch. 7 - The following is an excerpt from a conversation...Ch. 7 - Golden Eagle Company began operations in 2016 by...Ch. 7 - Prob. 4CPCh. 7 - Prob. 5CPCh. 7 - Prob. 6CP
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- Write out the formula for the total costs of carrying and ordering inventory, and then use the formula to derive the EOQ model.arrow_forwardConsidering the following information, and applying the lower-of-cost-or-market approach, what is the correct value that should be reported on the balance sheet for the inventory?arrow_forwardThe following information is taken from a companys records. Applying the lower-of-cost-or-market approach, what is the correct value that should be reported on the balance sheet for the inventory?arrow_forward
- Based on the data in Exercise 6-15 part (a) and assuming that cost was determined by the FIFO method, show how the inventory would appear on the balance sheet.arrow_forwardWhich of the following statements about FIFO is true? Select one: a. All of the statements are correct b. Cost of goods sold is calculated using the costs of the earliest purchased inventory. c. The value of merchandise inventory is made up of the costs of the most recently purchased inventory. d. Under FIFO, a schedule is used to track the different costs of purchased inventory.arrow_forwardOn the basis of the following data, determine the value of the inventory at the lower-of-cost-or-market by applying lower-of-cost-or-market to shown in Exhibit 10.arrow_forward
- give me the weighted average cost per unit and ending inventory for FIFO, LIFO, and for Average-Cost.arrow_forwardcalculate cost of goods sold, gross margin and ending inventory using i) FIFO and ii) Weighted - averagearrow_forwardThe moving average inventory cost flow assumption is applicable to which of the following inventory systems?arrow_forward
- Required: Compute the inventory cost using a. Moving average method b. FIFO methodarrow_forwardWhen inventory is purchased in a basket purchase, several steps are required. Which of the following is NOT one of the required steps? Estimate the market value of each item. Divide the market value of each item by the total market value for the basket. Divide the allocated cost by the number of units to determine the cost per unit. Compare the allocated cost to the traditional historical cost and use the lower value.arrow_forwardWhen using the periodic inventory system and weighted-average inventory costing method, when is the weighted-average cost per unit computed?arrow_forward
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