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Exercises 8-33 EXERCISES ue of that tory. 50, a ould the BR] Lower of Cost or Market Stiles Corporation uses the lower of cost or

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Exercises 8-33 EXERCISES ue of that tory. 50, a ould the BR] Lower of Cost or Market Stiles Corporation uses the lower of cost or market rule for each of two products in its 108.1 ending inventory. A profit margin of 30% on the selling price is considered normal for each product. Specific data for each product are as follows: Product A Product B Historical cost $ 80 $ 96 Replacement cost 70 98 Estimated cost of disposal 32 30 Estimated selling price 150 120 Required: 1. Assume that Stiles uses the FIFO cost flow assumption. What is the correct inventory value for each product? 2. Assume that Stiles uses the LIFO cost flow assumption. What is the correct inventory value for each product? 3. Next Level With regard to requirement 2, what effect does the imposition of the constraints on market value have on the inventory valuations? E8-2 Lower of Cost or Market The following information for Tuell Company is available: LO 8.1 Case 1 2 3 4 5 Cost $5.00 $5.00 $5.00 $5.00 $5.00 Net realizable value 5.10 5.50 4.80 4.20 4.70 Net realizable value less normal profit 4.80 5.30 4.70 4.00 4.60 Replacement cost 5.30 5.20 4.60 4.10 4.80 Required: 1. Assume Tuell uses the LIFO cost flow assumption. What is the correct inventory value in each of the preceding! IS CAP

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