7-INVENTORY COSTING USING THE LOWER OF COST OR MARKET RULE 1. Use the following information to calculate inventory applying LCM by item Recorded Replacement cost cost Item A Expected sales price Disposal Normal profit costs margin $12 $13 $16 $2 $3 Item B $22 $20 $24 $5 $2 Item C $17 $16 $19 $2 $2 Item D $42 $38 $60 $6 $8 Item E $32 $30 $40 $6 $3 Item F $18. $20 $241 $7 $2 2. At year end 20X8, Ancho Canned Chile has 8.000 units on hand at a weighted- average cost of $13 per item. At year end, Ancho learns that the purchase price has fallen to $11. Sales for the year were at $16 per item. Resellers cost Ancho an average $4 per unit. Ancho's normal profit margin is $3 per unit. c. a. What is Ancho's ending inventory applying LCM by item? b. If the loss is not significant enough to warrant disclosure on the income statement, what year end journal entry does Ancho record? If the market value of the inventory increases in the following year, can Ancho recognize the recovery? De Hardware presents the following inventory Ve See Mastering Inventory 4. A physical inventory of Nuvo VCR taken on December 31 reveals the following Games Xbox Wii Video DVDs Blu Ray Units on hand Cont per unit Market per unit 300 $26 $24 150 23 24 200 $7 $6 100 11 12 a. Calculate ending inventory, applying LCM to the entire inventory. b. Calculate ending inventory, applying LCM by group. c. Calculate ending inventory, applying LCM by item. 010.000 mitmant for 6. On November 1, 20X8, your company signs a $10,000 purchase commitment for goods to be delivered on February 15, 20X9. At year end 20X8, the estimated value of the goods on order is $7,500. What is the journal entry to record to record the impact of the change in market value at year-end 20X8? b. On February 15, 20X9, the market value of the goods is $8,000. What is the journal entry to record the impact of the change in market value at year end 20X9