5. 6. 7. The total market value of the work in process inventory is $84,700. Included in the cost of factory supplies are obsolete items with an historical cost of $6,800. The mar- ket value of the remaining factory supplies is $40,100. Captiva applies the lower-of-cost-or-market method to each of the three types of seat components in finished goods inventory. For each of the other three inventory accounts, Captiva applies the lower- ofcost or-market method to the total of each inventory account. Consider all amounts presented above to be material in relation to Captiva's nancial statements taken as a whole. Instructions (a) (b) (C) Prepare the inventory section of Captiva's balance sheet as of April 30, 2014, including any required note(s). Without prejudice to your answer to (a), assume that the market value of Captiva's inventories is less than cost. Explain how this decline would be presented in Captiva's income statement for the scal year ended April 30, 2014. Assume that Captiva has a firm purchase commitment for the same type of electronic control units included in the raw materials inventory as of April 30, 2014, and that the purchase commit- ment is at a contracted price 10% greater than the current market price. These electronic control units are to be delivered to Captiva after April 30, 2014. Discuss the impact, if any, that this pur- chase commitment would have on Captiva's financial statements prepared for the fiscal year ended April 30, 2014. (CMA adapted)