1. Determine the inventory at cost as well as at the lower of cost or market, using the The method of inventory costing based on the assumption that the costs of merchandise sold should be charged against revenue in the order in which the costs were incurred.first-in, first-out method. Record the appropriate unit costs on the inventory sheet and complete the pricing of the inventory. When there are two different unit costs applicable to an item:

Lower-of-Cost-or-Market Inventory Data on the physical inventory of Katus Products Co. as of December 31 follow: Market Value per Unit Inventory Inventory (Net Realizable Value) Quantity Item $56 37 A54 178 24 C77 132 30 F66 545 21 H83 375 K12 18 90 Q58 235 8 S36 20 140 V97 744 17 Y88 Quantity and cost data from the last purchases invoice of the year and the next-to-the-last purchases invoice are summarized as follows: Last Next-to-the-Last Purchases Invoice Purchases Invoice Quantity Unit Quantity Unit Inventory Purchased Purchased Item Cost Cost 30 $60 $58 A54 40 C77 25 174 15 180 F66 20 130 15 128 540 H83 6 547 15 500 6 500 K12 26 Q58 75 25 80 256 4 260 S36 100 17 16 V97 115 750 Y88 10 740 Required: Determine the inventory at cost as well as at the lower of cost or market, using the first-in, first-out method. Record the appropriate unit costs on the inventory sheet and complete the pricing of the inventory. When there are two different unit costs applicable to an item: 1. Insert the quantity and unit cost of the last purchase. 2. Insert the quantity and unit cost of the next-to-the-last purchase. 3. Total the cost and market columns and insert the lower of the two totals in the LCM column. The first item on the inventory sheet has been completed as an example. Inventory Sheet December 31 Market Value per Unit Inventory Inventory Cost per Quantity Unit Total Market Item (Net Realizable Value) Total Cost Total LCM A54 37 $60 $56 $1,800 $1,680 30 58 56 406 392 $2,072 2,206 2,072 C77 24 178 F66 30 132 132 Inventory Sheet December 31 Market Value per Unit Inventory Inventory Cost per (Net Realizable Value) Quantity Unit Total Cost Total Market Total LCM Item A54 37 30 $60 $56 $1,800 $1,680 7 58 56 406 392 2,206 2,072 $2,072 178 C77 24 F66 30 132 132 83 21 545 545 K12 375 Q58 ac 18 18 V97 140 20 20 Y88 17 744 744 Total $1 $