Lower-of-Cost-or-Market

Stalberg Company's beginning inventory and purchases during the fiscal year ended December 31, 20--, were as follows:

		Units	Unit Price		Total Cost
Jan. 1	Beginning inventory	10	$20		$200
Mar. 5	1st purchase	10	22		220
Sept. 9	2nd purchase	10	25		250
Dec. 8	3rd purchase	10	30		300
		40			$970

There are 10 units of inventory on hand on December 31.

Question Content Area

1. Calculate the total amount to be assigned to the ending inventory under each of the following periodic inventory methods:

a. FIFO

b. Weighted-average (round calculations to two decimal places.)

2. Assume that the market price per unit (cost to replace) of Stalberg's inventory on December 31, 20--, was $26. Calculate the total amount to be assigned to the ending inventory on December 31 under each of the following methods:

a. FIFO lower-of-cost-or-market

b. Weighted-average lower-of-cost-or-market

3. What journal entry would be made under lower-of-cost-or-market for parts 2(a) FIFO and 2(b) Weighted-average?

If no entry is required, select "No Entry Required".