Question
Lower Cost or Market The accountant for Murphy Company prepared the following analysis of its inventory at year-end: Item Units Cost per Unit Net Realizable
Lower Cost or Market
The accountant for Murphy Company prepared the following analysis of its inventory at year-end:
| Item | Units | Cost per Unit | Net Realizable Value | ||
| RSK-89013 | 490 | $38 | $44 | ||
| LKW-91247 | 329 | 49 | 45 | ||
| QEC-57429 | 462 | 25 | 33 | ||
Required:
1. Compute the carrying value of the ending inventory using the lower cost or market method applied on an item-by-item basis.
2. Prepare the journal entry required to value the inventory at a lower cost or market:
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Advanced Accounting
Authors: Floyd A. Beams, Robin P. Clement, Suzanne H. Lowensohn, Joseph H. Anthony
9th Edition
0131851225, 978-0131851221
