Almaden Hardware Store sells two distinct types of products, too

Almaden Hardware Store sells two distinct types of products, tools and paint products. Information pertaining to its 2011 year-end inventory is as follows:


Required:

1. Determine the balance sheet inventory carrying value at year-end, assuming the LCM rule is applied to

(a) Individual products,

(b) Product type, and

(c) Total inventory.

2. Assuming that the company recognizes an inventory write-down as a separate income statement item, for each of the LCM applications determine the amount of the loss.


Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...