Printmaster Distributors Company sells laser printers and replacement toner cartridges. Printmaster sells two models€” black and color laser printers. The black printers and black toner cartridges are in Group 100 and the color printer and color toner cartridges are in Group 200. Printmaster provided the following information regarding inventory at the end of the current year.

Definitions:
CRC = Current Replacement Cost
SP = Selling Price
Disposal = Costs of Completion and Disposal
NPM = Normal Profit Margin
Required
a. Conduct a lower- of- cost- or- market test for Printmaster, assuming it uses the total inventory approach for LCM computations.
b. Conduct a lower- of- cost- or- market test for Printmaster, assuming it uses the individual- item approach for LCM computations.
c. Conduct a lower- of- cost- or- market test for Printmaster, assuming it uses the group- by- group approach for LCM computations.
d. Prepare the journal entry needed to adjust Printmaster€™s inventory to a lower- of- cost- or- market (LCM) basis assuming that LCM is applied to product groups. Printmaster uses the indirect approach to record any adjustments to LCM.

Transcribed Image Text:

Group # #100 Black Laser Printer #100 Black Toner #200 Color Laser Printer #200 Color Toner Model # CRC #Of Units SP Disposal S20 10 25 NPM Cost LP100 BT100 CP200 CT200 S175 40 200 65 2,000 1,500 3,400 2,750 $210 $35 $170 16 20 25 235 185 145