Problem P10-16 Please

Discussion Questions X + n.com/epub/sn_710f1/data-uuid-Obdecf5685b34eaab03e989a93c89d1b#data-uuidcf819a2c47cc48fbabb2fd979833fa2d P10-16 Computing inventory impairment (@LO 10-10) Ramps by Jake, Inc., manufactures skateboard ramps. The company uses independent sales representatives to market its products and pa a commission of 8% on each sale. Data regarding the five styles of ramps in the company's inventory at December 31, 20X1. follow. The normal profit margin on each style is expressed as a percentage of the item's selling price. Jake has multiple units of each style and uses the LIFO cost flow assumption. Cost Inventory Item Style A Replacement Cost Selling Price Normal Profit Margin % $150 $155 $210 35% Style B 198 195 275 40 Style 83 77 130 30 Style D 275 280 290 30 Style E 420 430 450 20 Page 10-71 Required: Jake applies LCM to each individual unit. Determine the appropriate inventory value to use for each item in the company's December 31. 20X1. inventory under U.S. GAAP P10-17 Computing inventory impairment (CLO 10-10, LO 10-11) 1. Refer to the facts in Problem 10-16. Repent the requirements assuming that Jake uses the FIFO cost flow assumption. 2. Explain how the financial statements are affected when a company decides that NRV should be used for the inventory value. 3. Repeat part I assuming that Jake has the same number of units for each inventory itom and it applies lower of cost and NRV to total inventory instead of to each individual unit. P Summary Discussion Questions X + n.com/epub/sn_710f1/data-uuid-Obdecf5685b34eaab03e989a93c89d1b#data-uuidcf819a2c47cc48fbabb2fd979833fa2d P10-16 Computing inventory impairment (@LO 10-10) Ramps by Jake, Inc., manufactures skateboard ramps. The company uses independent sales representatives to market its products and pa a commission of 8% on each sale. Data regarding the five styles of ramps in the company's inventory at December 31, 20X1. follow. The normal profit margin on each style is expressed as a percentage of the item's selling price. Jake has multiple units of each style and uses the LIFO cost flow assumption. Cost Inventory Item Style A Replacement Cost Selling Price Normal Profit Margin % $150 $155 $210 35% Style B 198 195 275 40 Style 83 77 130 30 Style D 275 280 290 30 Style E 420 430 450 20 Page 10-71 Required: Jake applies LCM to each individual unit. Determine the appropriate inventory value to use for each item in the company's December 31. 20X1. inventory under U.S. GAAP P10-17 Computing inventory impairment (CLO 10-10, LO 10-11) 1. Refer to the facts in Problem 10-16. Repent the requirements assuming that Jake uses the FIFO cost flow assumption. 2. Explain how the financial statements are affected when a company decides that NRV should be used for the inventory value. 3. Repeat part I assuming that Jake has the same number of units for each inventory itom and it applies lower of cost and NRV to total inventory instead of to each individual unit. P Summary