Exercise 6-47 (Algorithmic) Lower of Cost or Market Meredith's Appliance Store 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 Market Value per Unit Window air conditioner 15 $194 $110 Dishwasher 34 240 380 Refrigerator 27 392 605 Microwave 19 215 180 Washer (clothing) 36 195 290 Dryer (clothing) 21 168 245 1. Compute the carrying value of Meredith's ending inventory using the lower of cost or market rule applied on an item-by-item basis. 49910 Hide Feedback Incorrect Check My Work Feedback Set up a lower of cost or market analysis. Item-by-item lower of either cost or market goes in LCM column. Compare actual cost of inventory to LCM. If the LCM column is lower, then the inventory account is adjusted. Hide 2. Prepare the journal entry required to value the inventory at lower of cost or market. Cost of Goods Sold 18760 Inventory 18760 Reduce inventory to market value Hide Feedback Partially Correct Check My Work Feedback Set up a lower of cost or market analysis. Item-by-item lower of either cost or market goes in LCM column. Compare actual cost of inventory to LCM. If the LCM column is lower, then the inventory account is adjusted. 3. What is the conceptual justification for valuing inventory at the lower of cost or market? The input in the box below will not be graded, but may be reviewed and considered by your instructor. blank Hide Feedback Correct Check My Work