Q2

Chapter 05- Accounting for Inventories Demonstration Problem 5-3 - Lower of Cost or Market for Inventory Pleasant Grove Electronics carries four different types of calculators. The quantities, costs, and market values are shown below. Based on this information, determine the necessary lower of cost or market (LCM) write-down assuming Pleasant Grove determines LCM on an individual basis. Use a horizontal financial statements model to show how the write-down would affect the balance sheet, income statement, and statement of cash flows. Unit Unit Type Quantity Cost Market A 100 $12.00 $15.00 B 550 8.00 6.00 C 710 25.00 24.00