Intermediate Accounting 1 - Chapter 8 Question 1 (8 marks) Unit costs of the principle product sold by TGF Auto Parts Ltd. at the end of several successive accounting periods are shown in the top line of amounts below. Different units are in stock each period (none carried over). Beneath the actual cost figures are the anticipated selling prices and replacement costs of the product. Distribution costs average $12 per unit and sales commissions have averaged 10 percent of sales prices.

Year 1 Year 2 Year 3 Year 4 Actual Cost $130 $150 $156 $152 Sales Price 160 160 180 180 Replacement Cost 150 150 154 146

Required Applying the LCNRV, determine the unit inventory value for each year.

Question 2 (11 marks) The following information is available from TJ Foods Inc. for the year ended December 31, Year 1: At Cost At Retail Sales $100,000 Purchases $48,000 90,000 Inventory January 1, Year 1 24,000 54,000 Net Additional Markups 12,000 Net Markdowns 6,000

Required a) What is the inventory cost on December 31, Year 1 under the average cost retail method (Non LCNRV)? b) What is the inventory Cost on December 31, Year 1 under the average cost retail method (LCNRV)?