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Kingbird Home Improvement Company installs replacement siding, windows, and louvered glass doors for single-family homes and condominium complexes. The company is in the process of
Kingbird Home Improvement Company installs replacement siding, windows, and louvered glass doors for single-family homes and condominium complexes. The company is in the process of preparing its annual financial statements for the fiscal year ended May 31, 2017. Jim Alcide, controller for Kingbird, has gathered the following data concerning inventory At May 31, 2017, the balance in Kingbird's Raw Materials Inventory account was $412,080, and Allowance to Reduce Inventory to Market had a credit balance of $28,880 Alcide summarized the relevant inventory cost and market data at May 31, 2017, in the schedule below Alcide assigned Patricia Devereaux, an intern from a local college, the task of calculating the amount that should appear on Kingbird's May 31, 2017, financial statements for inventory at lower-of-cost-or-market as applied to each item in inventory. Devereaux expressed concern over departing from the historical cost principle. Assume Garcia uses LIFO inventory costing Replacement Net Realizable Value $56,560 85,648 169,983 141,400 $453,591 Cost Cost $63,125 80,194 125,240 127,260 Sales Price $64,640 94,940 188,264 156,348 $504,19.2 Normal Profit $5,151 7,474 18,685 15,554 $46,864 $70,700 Aluminum siding Cedar shake siding Louvered glass doors Thermal windows 86,860 113,120 141,400 Total $412,080$395,819 (a1) Determine the proper balance in Allowance to Reduce Inventory to Market at May 31, 2017 Balance in the Allowance to Reduce Inventory to Market s (a2) For the fiscal year ended May 31, 2017, determine the amount of the gain or loss that would be recorded due to the change in Allowance to Reduce Inventory to Market. The amount of the gain (loss) s
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