Lower-of-Cost-or-Market

For the weighted-average method, round calculations to two decimal places. If required, round your final answers to the nearest cent.

1. Calculate the total amount to be assigned to the ending inventory under each of the following periodic inventory methods.

2. Assume that the market price per unit (cost to replace) of Bouie's inventory on December 31, 20--, was $39. Calculate the total amount to be assigned to the ending inventory on December 31 under each of the following methods.

3. What journal entry would be made under lower-of-cost-or-market for parts 2(a) FIFO and 2(b) Weighted-average? If no entry is required, type "No entry required" for the account name and leave the amount boxes blank or enter "0".

Bouie Company's beginning inventory and purchases during the fiscal year ended December 31, 20--, were as follows:

		Units	Unit Price		Total Cost
Jan. 1	Beginning inventory	20	$30		$600
Mar. 5	1st purchase	22	34		748
Sept. 9	2nd purchase	24	35		840
Dec. 8	3rd purchase	22	40		880
		88			$3,068

There are 20 units of inventory on hand on December 31.

For the weighted-average method, round calculations to two decimal places. If required, round your final answers to the nearest cent.

1. Calculate the total amount to be assigned to the ending inventory under each of the following periodic inventory methods:

a. FIFO=

b. Weighted-average

2. Assume that the market price per unit (cost to replace) of Bouie's inventory on December 31, 20--, was $39. Calculate the total amount to be assigned to the ending inventory on December 31 under each of the following methods:

a. FIFO lower-of-cost-or-market b. Weighted-average lower-of-cost-or-market

What journal entry would be made under lower-of-cost-or-market for parts 2(a) FIFO and 2(b) Weighted-average? If no entry is required, type "No entry required" for the account name and leave the amount boxes blank or enter "0".

a.	Loss on write-down of inventory
	Merchandise inventory
b.	No entry required
	No entry required