Chapter $9$ Homework

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The cost to sell for each product consists of a $10$ percent sales commission. The normal profit for each product is $30$ percent of the selling price.

Required:

Determine the carrying value of ending inventory, assuming the lower of cost or market $($LCM$)$ rule is applied to individual products.

Determine the carrying value of inventory, assuming the LCM rule is applied to the entire inventory.

Assuming inventory write$-$downs are common for Forest, record any necessary year$-$end adjusting entry based on the amount calculated in requirement $2.$

Complete this question by entering your answers in the tabs below.

Required $1$

Required $2$

Required $3$

Determine the carrying value of ending inventory, assuming the lower of cost or market $($LCM$)$ rule is applied to individual products.

Note: Do not round intermediate calculations.

$\backslash$table$[[\backslash$table$[[$Product$],[($units$)]],$RC$,$NRV$,$NRV minus NP$,$Market,Cost,$\backslash$table$[[$Inventory$],[$value$]]],[A(1,000),,,,,,],[B(700),,,,,,],[C(900),,,,,,],[D(600),,,,,,],[E(900),,,,,,]]$

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$2$ of $3$

Next Forest Company has five products in its inventory. Information about ending inventory follows.

Product Quantity Unit Cost Unit Replacement Cost Unit Selling Price

A $1,000$ $ $22$ $ $24$ $ $28$

B $700272330$

C $900151420$

D $600191618$

E $900262425$

The cost to sell for each product consists of a $10$ percent sales commission. The normal profit for each product is $30$ percent of the selling price.

Required:

Determine the carrying value of ending inventory, assuming the lower of cost or market $($LCM$)$ rule is applied to individual products.

Determine the carrying value of inventory, assuming the LCM rule is applied to the entire inventory.

Assuming inventory write$-$downs are common for Forest, record any necessary year$-$end adjusting entry based on the amount calculated in requirement $2.$