*Problem 9-4 Pharoah Home Improvernent Company installs replacement siding, windows, and overed glass doors for single-family homes and condominiurm conplexes. The company is in the process of preparing its annual financial statements for the fiscal year ended May 31, 2017. Jim Alcide, controller for Pharoah, has gathered the following data concerning inventory At May 31, 2017, the balance in Pharoah's Raw Materials Inventory account was $448,800, and Allowance to Reduce Inventory to Market had a credit balance of $29,690. Alcide summarized the relevant inventory cost and market data at May 31, 2017, in the schedule below Alcide assigned Patricia Devereaux, an intern from a local college, the task of calculating the amount that should appear on Pharoah's May 31, 2017, 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. Replacement Net Realizable alue $61.600 93.280 185.130 154,000 S494,010 Cost Aluminum siding Cedar shake siding Louvered glass doors Thermal windows Cost $68,750 87,340 136,400 138,600 Sales Price $70,400 103,400 205,040 170,280 S549,120 Normal Profit $5,610 8,140 20,350 16,940 S51,040 $77,000 94,600 123,200 154,000 49 900$31,090 Total $448.800 (a1) Deternine the proper balance in Allowance to Reduce Inventory to Market at May 31, 2017 Balance in the Allowance to Reduce Inventory to Market (a2) For the fiscal year ended May 31, 2017, 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) s *Problem 9-4 Pharoah Home Improvernent Company installs replacement siding, windows, and overed glass doors for single-family homes and condominiurm conplexes. The company is in the process of preparing its annual financial statements for the fiscal year ended May 31, 2017. Jim Alcide, controller for Pharoah, has gathered the following data concerning inventory At May 31, 2017, the balance in Pharoah's Raw Materials Inventory account was $448,800, and Allowance to Reduce Inventory to Market had a credit balance of $29,690. Alcide summarized the relevant inventory cost and market data at May 31, 2017, in the schedule below Alcide assigned Patricia Devereaux, an intern from a local college, the task of calculating the amount that should appear on Pharoah's May 31, 2017, 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. Replacement Net Realizable alue $61.600 93.280 185.130 154,000 S494,010 Cost Aluminum siding Cedar shake siding Louvered glass doors Thermal windows Cost $68,750 87,340 136,400 138,600 Sales Price $70,400 103,400 205,040 170,280 S549,120 Normal Profit $5,610 8,140 20,350 16,940 S51,040 $77,000 94,600 123,200 154,000 49 900$31,090 Total $448.800 (a1) Deternine the proper balance in Allowance to Reduce Inventory to Market at May 31, 2017 Balance in the Allowance to Reduce Inventory to Market (a2) For the fiscal year ended May 31, 2017, 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) s
