Part A

Santana Rey of Business Solutions is evaluating her inventory to determine whether it must be adjusted based on lower of cost or market rules. Business Solutions has three different types of software in its inventory, and the following information is available for each.

Required

Compute the lower of cost or market for ending inventory assuming Rey applies the lower of cost or market rule to each product in inventory. Must Rey adjust the reported inventory value? Explain.

Part B

Selected accounts and balances for the three months ended March 31, 2019, for Business Solutions follow.

Required

1. Compute inventory turnover and days? sales in inventory for the three months ended March 31, 2019.

2. Assess the company?s performance if competitors average 15 times for inventory turnover and 25 days for days? sales in inventory.

Transcribed Image Text:

Inventory Items Cost per Unit Market per Unit Units Office productivity Desktop publishing. $ 74 100 3 $ 76 103 3 96 Accounting.... 90 Beginning inventory, January 1.... Cost of goods sold ... Ending inventory, March 31. 14,052 704