The homework is attached. It is about Intermediate Accounting (201) Chapter 9 - Inventories

Chapter 9 HW 1. Herman Company has three products in its ending inventory. Specific per unit data for each of the products are as follows: Product 1 Cost Replacement cost Selling price Disposal costs Normal profit margin Product 2 $20 18 40 6 5 Product 3 $90 85 120 40 30 $50 40 70 10 12 Required: What unit values should Herman use for each of its products when applying the LCM rule to ending inventory? 2. A fire destroyed a warehouse of the Goren Group, Inc., on May 4, 2011. Accounting records on that date indicated the following: Mechandise inventory, January 1, 2011 Purchases to date Freightin Sales to date $1,900,000 5,800,000 400,000 8,200,000 The gross profit ratio has averaged 20% of sales for the past four years. Required: Use the gross profit method to estimate the cost of the inventory destroyed in the fire. 3. On November 21, 2011, a fire at Hodge Company's warehouse caused severe damage to its entire inventory of Product Tex. Hodge estimates that all usable damaged goods can be sold for $12,000. The following information was available from the records of Hodge's periodic inventory system: Inventory, November 1 Net purchases from November 1, to the date of the fire Net sales from November 1, to the date of the fire $100,000 140,000 220,000 Based on recent history, Hodge's gross profit ratio on Product Tex is 35% of net sales. Required: Calculate the estimated loss on the inventory from the fire, using the gross profit method. 4. Tatum Company has four products in its inventory. Information about the December 31, 2011, inventory is as follows: Product Total Cost 101 102 103 104 $120,000 90,000 60,000 30,000 Total Replacement Cost Total Net Realizable Value $110,000 85,000 40,000 28,000 $100,000 110,000 50,000 50,000 The normal gross profit percentage is 25% of cost. Assume that Tatum Company prepares its financial statements according to IFRS. Required: 1. Determine the balance sheet inventory carrying value at December 31, 2011, assuming Tatum applies LCM rule to individual products. 2. Prepare a journal entry to record the inventory write-down, if necessary