Question
Home Stop sells two product categories, furniture and accessories. Information pertaining to its 2018 year-end inventory is as follows: Inventory, by Product Category Quantity Per
Home Stop sells two product categories, furniture and accessories. Information pertaining to its 2018 year-end inventory is as follows: Inventory, by Product Category Quantity Per Unit Cost Market Furniture: Chairs 30 $ 30 $ 36 Desks 70 78 63 Tables 40 89 97 Accessories: Rugs 60 65 53 Lamps 80 27 23 Required: 1. Determine the carrying value of inventory at year-end, assuming the lower of cost or market (LCM) rule is applied to (a) individual products, (b) product categories, and (c) total inventory. 2. Assuming that the company reports an inventory write-down as a line item in the income statement, for each of the LCM applications determine the amount of the loss.
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