Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Forester Company has five products in its inventory. Information about the December 31, 2021, inventory follows. Product Quantity Unit Cost Unit Replacement Cost Unit Selling

Forester Company has five products in its inventory. Information about the December 31, 2021, inventory follows.

Product Quantity Unit Cost Unit Replacement Cost Unit Selling Price
A 900 $ 11 $ 13 $ 17
B 500 16 12 19
C 900 4 3 9
D 600 8 5 7
E 700 15 13 14

The cost to sell for each product consists of a 20 percent sales commission. The normal profit for each product is 30 percent of the selling price. Required: 1. Determine the carrying value of inventory at December 31, 2021, assuming the lower of cost or market (LCM) rule is applied to individual products. 2. Determine the carrying value of inventory at December 31, 2021, assuming the LCM rule is applied to the entire inventory. 3. Assuming inventory write-downs are common for Forester, record any necessary year-end adjusting entry based on the amount calculated in requirement 2.

image text in transcribedimage text in transcribedimage text in transcribed

Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Determine the carrying value of inventory at December 31, 2021, assuming the lower of cost or market (LCM) rule is applied to individual products. (Do not round intermediate calculations.) RC NRV NRV-NP Market Cost Inventory carrying value Product (units) A (900) B (500) C (900) D (600) E (700) Total Required 1 Required 2 Required 3 Determine the carrying value of inventory at December 31, 2021, assuming the LCM rule is applied to the entire inventory. (Do not round intermediate calculations.). Inventory carrying value Required 1 Required 2 Required 3 Assuming inventory write-downs are common for Forester, record any necessary year-end adjusting entry based on the amount calculated in requirement 2. (Do not round intermediate calculations. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet Record any necessary year-end adjusting entry assuming that inventory write- downs are common for Forester Company. Note: Enter debits before credits. Transaction General Journal Debit Credit Record entry Clear entry View general journal

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing And Assurance Theory And Practice

Authors: Clifford Gomez

1st Edition

8120345665, 978-8120345669

More Books

Students also viewed these Accounting questions