# Printmaster Distributors Company sells laser printers and replacement toner cartridges. Printmaster sells two models black and color laser printers. The

## Question:

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.

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## Step by Step Answer:

**Related Book For**

## Intermediate Accounting

**ISBN:** 978-0132162302

1st edition

**Authors:** Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella

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