Lower-of-Cost-or-Market Inventory

On the basis of the following data, determine the value of the inventory at the lower of cost or market. Assemble the data in the form illustrated in Exhibit 10.

Product

Inventory Quantity

Cost Per Unit

Market Value per Unit (Net Realizable Value)

Class 1:

Model A 19$115 $112

Model B 39 142 138

Model C 39294 305

Class 2:

Model D 8 260 246

Model E 28 170 176

a. Determine the value of the inventory at the lower of cost or market applied to each item in the inventory.

Inventory at the Lower of Cost or Market

Product Inventory Quantity Cost per UnitMarket Value per Unit (Net Realizable Value)CostMarketLower of Cost or Market

Model A$$$$$

Model B

Model C

Model D

Model E

Total $$$

b. Determine the value of the inventory at the lower of cost or market applied to each class of inventory.

Inventory at the Lower of Cost or Market

Product Inventory QuantityCost per UnitMarket Value per Unit (Net Realizable Value)CostMarketLower of Cost or Market

Class 1:

Model A$$$$

Model B

Model C

Subtotal $$$

Class 2:

Model D$$

Model E

Subtotal $$

Total $$$

c. Determine the value of the inventory at the lower of cost or market applied to total inventory.

Inventory at the Lower of Cost or Market

Product Inventory Quantity Cost per UnitMarket Value per Unit (Net Realizable Value)CostMarketLower of Cost or Market

Model A$$$$

Model B

Model C

Model D

Model E

Total $$$

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