The December 31, 2010 inventory of Dwyer Company consisted of four products, for which certain information is provided below.

Replacement Estimated. Expected Normal Profit

Product Original Cost Cost Disposal Cost Selling Price on Sales

A $25.00 $22.00 $6.50 $40.00 $8.00

B $42.00 $40.00 $12.00 $48.00 $12.00

C $120.00 $115.00 $25.00 $190.00 $57.00

D $18.00 $15.80 $3.00 $26.00 $2.60

Instructions

1. Using the lower-of-cost-or-market approach applied on an individual-item basis, compute the inventory valuation that should be reported for each product on December 31, 2010.Make that nice chart!
2. Based on that nice chart you just made, make me the adjusting entry needed on December 31, 2010, using the direct method.