Management of Tarry Company reports the following inventory using LIFO and applies the lower of cost...

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Management of Tarry Company reports the following inventory using LIFO and applies the lower of cost or market rule. ■ Edgers: 1,680 units in inventory; cost is $22 each; replacement cost is $16 each; estimated sale price is $30 each; estimated distribution cost is $3 each; and normal profit is 10% of sale price. ■ Clippers: 1,120 units in inventory; cost is $50 each; replacement cost is $36 each; estimated sale price is $90 each; estimated distribution cost is $28 each; and normal profit is 20% of sale price. Required a. Determine the inventory cost to report on the balance sheet assuming that the company applies the lower of cost or market rule to each inventory item. b. Prepare the journal entry to apply the lower of cost or market rule to inventory assuming that the company adjusts inventory directly and adjusts equity through cost of goods sold. a. Inventory valuation for edgers $ Inventory valuation for clippers Total inventory valuation b. Account Name 0 To apply the lower of cost or market rule to inventory. Dr. Cr. Management of Tarry Company reports the following inventory using LIFO and applies the lower of cost or market rule. ■ Edgers: 1,680 units in inventory; cost is $22 each; replacement cost is $16 each; estimated sale price is $30 each; estimated distribution cost is $3 each; and normal profit is 10% of sale price. ■ Clippers: 1,120 units in inventory; cost is $50 each; replacement cost is $36 each; estimated sale price is $90 each; estimated distribution cost is $28 each; and normal profit is 20% of sale price. Required a. Determine the inventory cost to report on the balance sheet assuming that the company applies the lower of cost or market rule to each inventory item. b. Prepare the journal entry to apply the lower of cost or market rule to inventory assuming that the company adjusts inventory directly and adjusts equity through cost of goods sold. a. Inventory valuation for edgers $ Inventory valuation for clippers Total inventory valuation b. Account Name 0 To apply the lower of cost or market rule to inventory. Dr. Cr.

Answer rating: 100% (QA)

a Inventory valuation for edgers Cost of 1680 unit... View the full answer