Hullabaloo sells four styles of children€™s canvas tennis shoes. Information about Hullabaloo€™s May 31 ending inventory of these four styles is given in the following table.

Required:
(a) How much did Hullabaloo pay for the shoes that are in its May 31 inventory?
(b) If Hullabaloo had to replace its ending inventory of tennis shoes, what would it cost?
(c) What entry should be made to adjust Hullabaloo€™s inventory to the lower-of-cost-or-market amount if LCM is applied on a total inventory basis? On an item-by-item basis?
(d) Explain the effect the adjustment has on the income statement and balance sheet.

Transcribed Image Text:

Current Replacement Cost $23 Units in Ending Style 456 Style 489 Style 391 Style 599 Inventory 63 40 25 47 er Unit Cost $20 25 28 32 24 31