Home Stop sells two product categories, furniture and accessories. Information pertaining to its 2021 year-end inventory is as follows: Inventory, by Product Category Quantity Per Unit Cost Market Furniture: Chairs 70 $ 27 $ 33 Desks 40 75 60 Tables 40 86 94 Accessories: Rugs 50 62 50 Lamps 60 24 20 Required: 1. Determine the carrying value of inventory at year-end, assuming the lower of cost or market (LCM) rule is applied to (a) individual products, (b) product categories, and (c) total inventory. 2. Assuming inventory write-downs are common for Home Stop, record any necessary year-end adjustment amount for each of the LCM applications in requirement 1.
Home Stop sells two product categories, furniture and accessories. Information pertaining to its 2021 year-end inventory is as follows: Inventory, by Product Category Quantity Per Unit Cost Market Furniture: Chairs 70 $ 27 $ 33 Desks 40 75 60 Tables 40 86 94 Accessories: Rugs 50 62 50 Lamps 60 24 20 Required: 1. Determine the carrying value of inventory at year-end, assuming the lower of cost or market (LCM) rule is applied to (a) individual products, (b) product categories, and (c) total inventory. 2. Assuming inventory write-downs are common for Home Stop, record any necessary year-end adjustment amount for each of the LCM applications in requirement 1.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter7: Inventories: Cost Measurement And Flow Assumptions
Section: Chapter Questions
Problem 11P: Olson Company adopted the dollar-value LIFO method for inventory valuation at the beginning of 2015....
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