Smashing Pumpkins Company uses the lower-of-cost-or-market method, on an individual item basis, in pricing its inventory items.
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Question:
Smashing Pumpkins Company uses the lower-of-cost-or-market method, on an individual item basis, in pricing its inventory items. The inventory at December 31, 2014, consists of products D, E, F, G, H, and I. Relevant per-unit data for these products appear below.
Item D | Item E | Item F | Item G | Item H | Item I | |||||||||||||
Estimated selling price | $120 | $110 | $95 | $90 | $110 | $90 | ||||||||||||
Cost | 75 | 80 | 80 | 80 | 50 | 36 | ||||||||||||
Replacement cost | 120 | 72 | 70 | 30 | 70 | 30 | ||||||||||||
Estimated selling expense | 30 | 30 | 30 | 25 | 30 | 30 | ||||||||||||
Normal profit | 20 | 20 | 20 | 20 | 20 | 20 | ||||||||||||
Using the lower-of-cost-or-market rule, determine the proper unit value for balance sheet reporting purposes on December 31, 2014, for each of the inventory items above. Item F? Item G? The records of Ellen |
Related Book For
Intermediate Accounting
ISBN: 978-1118147290
15th edition
Authors: Donald E. Kieso, Jerry J. Weygandt, and Terry D. Warfield
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