Question
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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