E7-13 (Algo) Reporting Inventory at Lower of Cost or Market/Net Realizable Value [LO 7-4]

Peterson Furniture Designs is preparing the annual financial statements dated December 31. Ending inventory information about the five major items stocked for regular sale follows:

Required:

1-a. Complete the table column Write-Down per Item and then sum the final column.

1-b. Compute the amount of the total write-down when the LCM/NRV rule is applied to each item.

2. Prepare the journal entry Peterson Furniture Designs would record on December 31 to write down its inventory to LCM/NRV.

Complete the table column Write-Down per Item and then sum the final column.

Item	Unit Cost (FIFO)	NRV per Item	Write-down per Item	Quantity on Hand	Total Write-down
Alligator Armoires	$60	$56		50
Bear Bureaus	55	55		30
Cougar Credenzas	53	59		80
Dingo Cribs	55	55		70
Elephant Dressers	22	14		50