Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Problem 9-05 a-b Pina Co. follows the practice of valuing its inventory at the lower-of-cost-or-market. The following information is available from the company's inventory records

image text in transcribed

image text in transcribed

Problem 9-05 a-b Pina Co. follows the practice of valuing its inventory at the lower-of-cost-or-market. The following information is available from the company's inventory records as of December 31, 2020. Unit Cost Item Quantity 1,300 1,000 1,200 1,200 1,600 A Estimated Selling Price/Unit $10.71 9.59 7.34 Replacement Cost/Unit $8.57 8.06 5.51 $7.65 8.36 5.71 3.88 6.53 Completion & Disposal Cost/Unit $1.53 0.92 1.17 0.82 Normal Profit Margin/Unit $1.84 1.22 0.61 B D 4.28 6.43 1.53 E 6.43 6.83 0.71 1.02 Greg Forda is an accounting clerk in the accounting department of Pina Co., and he cannot understand why the market value keeps changing from replacement cost to net realizable value to something that he cannot even figure out. Greg is very confused, and he is the one who records inventory purchases and calculates ending inventory. You are the manager of the department and an accountant. Calculate the lower-of-cost-or-market using the individual-item approach. Lower-of-Cost-or-Market (Per unit basis) Item A $ Item B $ Item C $ Item D $ $ Item E $ Show the journal entry he will need to make in order to write down the ending inventory from cost to market. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts.) Debit Credit Account Titles and Explanation Cost of Goods sold Method: The Loss method: Question Attempts: 0 of 8 used

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_2

Step: 3

blur-text-image_3

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

The Social Work Ethics Audit A Risk Management Tool

Authors: Frederic G. Reamer

1st Edition

0871013282, 978-0871013286

More Books

Students also viewed these Accounting questions