Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Marigold 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

image text in transcribed

Marigold 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, 2020. Jim Alcide, controller for Marigold, has gathered the following data concerning inventory. At May 31, 2020, the balance in Marigold's Raw Materials Inventory account was $489,600, and Allowance to Reduce Inventory to Market had a credit balance of $29,890. Alcide summarized the relevant inventory cost and market data at May 31, 2020, in the schedule below. Alcide assigned Patricia Devereaux, an intern from a local college, the task of calculating the amount that should appear on Marigold's May 31, 2020, 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. Aluminum siding Cedar shake siding Louvered glass doors Thermal windows Total Cost $84,000 103,200 134,400 168,000 $489,600 Replacement Cost $75,000 95,280 148,800 151,200 $470,280 Sales Price $76,800 112,800 223,680 185,760 $599,040 Net Realizable Value $67,200 101,760 201,960 168,000 $538,920 Normal Profit $6,120 8,880 22,200 18,480 $55,680 (21) Determine the proper balance in Allowance to Reduce Inventory to Market at May 31, 2020. Balance in the Allowance to Reduce Inventory to Market $ (a2) For the fiscal year ended May 31, 2020, 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) $

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Software Reviews And Audits A How To Guide For Project Staff

Authors: Dr David Tuffley

1st Edition

1461130468, 978-1461130468

More Books

Students also viewed these Accounting questions

Question

=+(5.42) E[n \N2] = a, Var[n 'N.] - B - x2 +H-P n

Answered: 1 week ago