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Teal Mountain, Inc. values its inventory at the lower-of-LIFO-cost-or-market. The following information is available from the companys inventory records as of December 31, 2020. Item

Teal Mountain, Inc. values its inventory at the lower-of-LIFO-cost-or-market. The following information is available from the companys inventory records as of December 31, 2020.

Item

Quantity

Unit Cost

Replacement Cost/Unit

Estimated Selling Price/Unit

Completion & Disposal Cost/Unit

Normal Profit Margin/Unit

X490 9,384 $11.50 $10.99 $12.88 $2.76 $3.13
X512 4,554 6.44 6.90 8.19 0.23 1.66
X682 16,560 17.48 17.11 29.03 2.99 8.28
Z195 11,500 13.11 12.88 18.22 1.29 5.29
Z846 7,912 11.04 11.73 12.83 1.93 1.01

(a)

Calculate the lower-of-cost-or-market using the individual-item approach. (Round answers to 2 decimal places, e.g. 52.75.)

Lower-of-Cost-or-Market (Per unit basis)

X490

$enter a dollar amount

X512

$enter a dollar amount

X682

$enter a dollar amount

X195

$enter a dollar amount

X846

$enter a dollar amount

(b)

Show the journal entries Teal Mountain, Inc. will need to make in order to write down the ending inventory from cost to market. Assume this is Teal Mountains first year of operations. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to 0 decimal places, e.g. 5,275.)

Account Titles and Explanation

Debit

Credit

Cost of Goods sold Method:

enter an account title

enter a debit amount

enter a credit amount

enter an account title

enter a debit amount

enter a credit amount

Loss method:

enter an account title

enter a debit amount

enter a credit amount

enter an account title

enter a debit amount

enter a credit amount

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