Part 1 Additional Inventory Issues Question 1 Lower of Cost or Market (10 Points) Jessicas uses the lower of cost or market method to price inventory Jessica sells two items, Item A and Item B Below is the relevant data for Inventory Items A and B at 12 31 20 Item A Item B Estimated Selling Expense $2,500 $2,000 Cost $3,750 $6,575 Normal Profit $1,000 $2,250 Estimated Selling Price $6,500 $10,000 Replacement Cost $5,000 $6,000 (A) Assume Jessica applies the lower of cost or market method on an item by item basis What is the value of Inventory that would be reported on Jessicas balance sheet at 12 31 20 Show your work for Part 1, Question 1 (A) here () (B) Assume Jessica applies the lower of cost or market method on an entire inventory basis What is the value of Inventory that would be reported on Jessicas balance sheet at 12 31 20 Show your work for Part 1, Question 1 (B) here

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Question: Part 1: Additional Inventory Issues Question 1: Lower of Cost or Market (10 Points) Jessicas uses the lower of cost-or-market method to price inventory. Jessica

Part 1: Additional Inventory Issues

Question 1: Lower of Cost or Market (10 Points)

Jessicas uses the lower of cost-or-market method to price inventory. Jessica sells two items, Item A and Item B. Below is the relevant data for Inventory Items A and B at 12/31/20:

	Item A	Item B
Estimated Selling Expense	$2,500	$2,000
Cost	$3,750	$6,575
Normal Profit	$1,000	$2,250
Estimated Selling Price	$6,500	$10,000
Replacement Cost	$5,000	$6,000

(A) Assume Jessica applies the lower of cost-or-market method on an item-by-item basis. What is the value of Inventory that would be reported on Jessicas balance sheet at 12/31/20?

Show your work for Part 1, Question 1 (A) here ():

(B) Assume Jessica applies the lower of cost-or-market method on an entire inventory basis. What is the value of Inventory that would be reported on Jessicas balance sheet at 12/31/20?

Show your work for Part 1, Question 1 (B) here:

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