Skittles-R-Us is trying to determine its ending inventory in accordance with Generally Accepted Accounting Principles. At the end of the year, information related to inventory is as follows.

The following information is about Plain Skittles:

The ending inventory cost from the book was $64,000,000 and the market value was $70,000,000.

The following information is about Tropical Skittles:

Tropical Skittles book cost was 50,000,000.

There is also information related to market value for each individual bag of Tropical Skittles and there are 8,000,000 bags in total.

Sales price: $15 per bag

Disposal cost: $2 per bag

Profit margin: 60% of sales price

Replacement cost: $6 per bag is the most current purchase price

Required:

(1)(10 points).

a)Calculate possible market values and designated market value for Tropical Skittles per bag if LIFO were the inventory method used for inventory accounting. Show all calculations.

b)Calculate possible market values and designated market value for Tropical Skittles per bag if FIFO were the inventory method used for inventory accounting. Show all calculations.

(2) (5 points) Assume that LIFO were inventory method used for inventory accounting. Calculate the two possible total ending inventories for Skittles-R-Us based on Lower Cost or Market.

	Plain	Tropical
Book Value
Market Value

(3) (5 points) Record any necessary adjusting entry in proper form. Assume that Skittles-R-Us uses the allowance account to do lower cost or market adjustment and there is a $0 balance in the allowance to reduce inventor to LCM account. If no adjusting entry needed in the current year, state No journal entry required.