Negredo Medical Supplies uses LIFO cost flow assumption and has developed the following data for its...
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Negredo Medical Supplies uses LIFO cost flow assumption and has developed the following data for its products: Surgical Equipment Surgical Supplies Number of units in inventory Per unit: 400 370 205 345 255 Selling Price Cost 175 Replacement cost 325 64 30% 165 Cost to sell 22 Normal gross profit ratio 35% Normal gross profit ratio is expressed as a percentage of selling price. Negredo adjusts an allowance account at year-end to record net realizable value adjustments to its inventory. All products are reported at cost at the beginning of the year. The entry at year-end will: Multiple Choice reduce equity by $3,700 increase liabilities by $3,700 reduce assets by $31,000 reduce equity by $31,000 Negredo Medical Supplies uses LIFO cost flow assumption and has developed the following data for its products: Surgical Equipment Surgical Supplies Number of units in inventory Per unit: 400 370 205 345 255 Selling Price Cost 175 Replacement cost 325 64 30% 165 Cost to sell 22 Normal gross profit ratio 35% Normal gross profit ratio is expressed as a percentage of selling price. Negredo adjusts an allowance account at year-end to record net realizable value adjustments to its inventory. All products are reported at cost at the beginning of the year. The entry at year-end will: Multiple Choice reduce equity by $3,700 increase liabilities by $3,700 reduce assets by $31,000 reduce equity by $31,000
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Lower of cost or market LCM is an inventory valuation method required for companiesIn the lower of c... View the full answer
Related Book For
Financial and Managerial Accounting
ISBN: 978-1285078571
12th edition
Authors: Carl S. Warren, James M. Reeve, Jonathan Duchac
Posted Date:
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