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?

Data from E8-1

Transcribed Image Text:

Product A Product B Historical cost $ 80 $ 96 Replacement cost Estimated cost of disposal Estimated selling price 70 98 32 30 150 120