PLEASE WRITE DOWN ALL PROCESS OF CALCULATION ( DO NOT USE EXCEL), THE KEYS ARE SHOWN.

Problem 7, continued:

On December 31, 2021, due to deteriorating demand for item A, management estimates the selling price to be $10.00, with an estimated cost to complete and sell of $4.00. Normal profit margin is 20% of selling price. Current replacement cost is $5.30

Assume that Matlock Corporation uses the Periodic FIFO method. Determine the Lower of Cost or Net Realizable Value as of December 31, 2021.

Cost = $8,340 Net Realizable Value = ($10 - $4) x (840 + 600 units) = $8,640

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The Lower of Cost or Net Realizable Value is $___________8,340 cost__________________

Assume that Matlock Corporation uses the Periodic LIFO method. Determine the Lower of Cost or Market as of December 31, 2021.

The Lower of Cost or Market is $______$7,632 Replacement Cost_____________________

Net Realizable Value($10 - $4) x (1,040 + 400 units) = $8,640

NRV Normal Profit = ($10 - $4 -$2) x 1,440 units = 5,760

Replacement Cost = $5.30 x 1,440 units = 7,632

Cost = $7,820 Designated Market is Replacement Cost $7,632

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LCM = $7,632, Replacement Cost