1. excercise 656 Lower of Cost or Market

   Han Sales and Services has the following data for the items in its inventory at the end of the accounting period:

   Item	Number of Units		Historical Cost per Unit		Selling Price per Unit		Disposal Costs
   Window air conditioner	25		$194		$110		$45
   Dishwasher	34		270		380		24
   Refrigerator	39		382		605		25
   Microwave	19		225		180		15
   Washer (clothing)	36		180		290		42
   Dryer (clothing)	24		168		245		50

   Required:

   1. Compute the carrying value of ending inventory using the lower of cost or market rule applied on an item-by-item basis. $

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   2. Prepare the journal entry required to value the inventory at lower of cost or market.

   	Accounts Payable Accounts Receivable Cash Cost of Goods Sold Inventory
   	Accounts Payable Cash Cost of Goods Sold Inventory Sales Revenue
   	(Inventory adjustment to market value)

   6-57

   Shaw Systems sells a limited line of specially made products, using television advertising campaigns in large cities. At year end, Shaw has the following data for its inventory:

   Item	Number of Units	Historical Cost per Unit	Selling Price per Unit	Disposal Costs
   Phone	625	$24	$25	$5
   Stereo	180	177	200	10
   Electric shaver	215	30	31	3
   MP3 alarm clock	450	26	27	2
   Handheld game system	570	40	45	3

   Required:

   1.

   Compute the carrying value of the ending inventory using the lower of cost or market rule applied on an item-by-item basis.

   2.

   Prepare the journal entry required to value the inventory at lower of cost or market.

   . Compute the carrying value of the ending inventory using the lower of cost or market rule applied on an item-by-item basis.

   Carrying Value

   669)

   Penelope Pittston, the president of Cameron Appliances, has prepared the following information for the company's television inventory at the end of 2019:

   Model	Quantity		FIFO Cost per Unit		Selling Price per Unit		Disposal Costs
   T-260	11		$275		$480		$35
   S-256	24		325		330		30
   R-193	18		210		250		20
   Z-376	12		285		290		40

   Required:

   1. Determine the carrying amount of the inventory using lower of cost or market applied on an item-by-item basis. $

   2. Prepare the journal entry required to value the inventory at lower of cost or market.

   	(Reduced inventory to market value)