Question
Brown Company carries four items in inventory. The following data is available about the items in inventory as of December 31, 2014. Determine the proper
Brown Company carries four items in inventory. The following data is available about the items in inventory as of December 31, 2014. Determine the proper inventory value using the lower-of-cost-or-market method on (a) an item-by-item basis and (b) a total inventory basis. In each instance, make any necessary journal entries.
| Item | Number Of Units | Historical Cost | Replacement Cost | Estimated Selling Price | Estimated Selling Costs | Profit Margin (as a % of sales) |
| T-shirts | 150 | $15 | $16 | $20 | $3 | 15% |
| Shorts | 200 | 9 | 5 | 10 | 2 | 10% |
| Socks | 100 | 18 | 21 | 30 | 4 | 20% |
| Pants | 125 | 30 | 28 | 40 | 5 | 25%
|
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Financial Accounting
Authors: Karen Bird, Gene Imhoff
3rd Edition
0984200541, 9780984200542
