Cost Allocation and Lower-of-Cost-or-Market

Douglas Company's beginning inventory and purchases during the fiscal year ended December 31, 20--, were as follows:

		Units	Unit Price	Total Cost
January 1, 20--	Beginning inventory	1,120	$	8.2	$	9,184
March 5	1st purchase	920		9.2		8,464
April 16	2nd purchase	410		9.7		3,977
June 3	3rd purchase	690		10.4		7,176
August 18	4th purchase	600		11.1		6,660
September 13	5th purchase	800		12.1		9,680
November 14	6th purchase	420		14		5,880
December 3	7th purchase	480		14.05		6,744
		5,440			$	57,765

There are 1,000 units of inventory on hand on December 31.

Required:

For the weighted-average method, round calculations to two decimal places. Round all final answers to the nearest dollar.

1. Calculate the total amount to be assigned to the ending inventory and cost of goods sold on December 31 under each of the following methods:

	Cost of Goods Sold	Cost of Ending Inventory
a. FIFO	$fill in the blank 1	$fill in the blank 2
b. LIFO	$fill in the blank 3	$fill in the blank 4
c. Weighted-average	$fill in the blank 5	$fill in the blank 6

2. Assume that the market price per unit (cost to replace) of Douglas's inventory on December 31 was $13. Calculate the total amount to be assigned to the ending inventory on December 31 under each of the following methods:

a. FIFO lower-of-cost-or-market	$fill in the blank 7
b. Weighted-average lower-of-cost-or-market	$fill in the blank 8

3. Prepare required entries to apply:

a. FIFO lower-of-cost-or-market
b. Weighted-average lower-of-cost-or-market

If no entry is required, select "No entry required" and leave the amount boxes blank or enter "0".

	Description	Debit	Credit
a.	Accounts payableAccounts receivableCashLoss on Write-Down of InventoryMerchandise InventoryNo entry required	fill in the blank 10
	Accounts payableAccounts receivableCashLoss on Write-Down of InventoryMerchandise InventoryNo entry required		fill in the blank 12
b.	Accounts payableAccounts receivableCashLoss on Write-Down of InventoryMerchandise InventoryNo entry required	fill in the blank 14
	Accounts payableAccounts receivableCashLoss on Write-Down of InventoryMerchandise InventoryNo entry required		fill in the blank 16