The inventory of 3T Company on December 31, 2014,
consists of the following items.
E9-1 (Lower-of-Cost-or-Market) The inventory of 3T Company on December 31, 2014, consists of the following items.
Part No.
|
Quantity
|
Cost Per Unit
|
Cost to
Replace per Unit
|
||
110
|
600
|
$90
|
$100.00
|
||
111
|
1,000
|
60
|
$52.00
|
||
112
|
500
|
80
|
$76.00
|
||
113
|
200
|
170
|
$180.00
|
||
120
|
400
|
205
|
$208.00
|
||
121
|
1,600
|
16
|
$14.00
|
||
122
|
300
|
240
|
$235.00
|
||
Part No. 121 is
obsolete and has a realizable value of each as scrap:
|
$0.20
|
||||
Part No.
|
Quantity
|
Per Unit
Cost |
Market
|
Total Cost
|
Total
Market |
Lower of
Cost or Market |
110
|
600
|
$90
|
$100.00
|
|||
111
|
1,000
|
60
|
52.00
|
|||
112
|
500
|
80
|
76.00
|
|||
113
|
200
|
170
|
180.00
|
|||
120
|
400
|
205
|
208.00
|
|||
121
|
1,600
|
16
|
14.00
|
|||
122
|
300
|
240
|
$235.00
|
|||
Totals
|
Instructions
Complete the table above by inserting the correct
values or formulas into the yellow highlighted cells. From this data, answer
the following two questions:
(a)
Determine the inventory as of December 31, 2014, by the lower-of-cost-or-market
method, applying this method directly to
each item.The valuation of inventory as of December 31, 2014, by the lower of cost or market method, as applied directly to each item is:
(b) Determine the inventory by the lower-of-cost-or-market method, applying the method to the total
of the inventory. The valuation of inventory as of December 31, 2014, by the lower of cost or market method, as applied to total inventory is:
TUTORIAL PREVIEW
Part No.
|
Quantity
|
Per Unit
Cost |
Market
|
Total Cost
|
Total
Market |
Lower of
Cost or Market |
110
|
600
|
$90
|
$100.00
|
$54,000
|
$60,000
|
$54,000
|
111
|
1,000
|
60
|
52.00
|
60,000
|
52,000
|
52,000
|
