Question
In: Accounting
Exercise 9-07 Windsor Company follows the practice of pricing its inventory at the lower-of-cost-or-market, on an...
Exercise 9-07
Windsor Company follows the practice of pricing its inventory at
the lower-of-cost-or-market, on an individual-item basis.
|
Item No. |
Quantity |
Cost per Unit |
Cost to Replace |
Estimated Selling Price |
Cost of Completion and Disposal |
Normal Profit |
||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
1320 |
1,600 | $3.46 | $3.24 | $4.86 | $0.38 | $1.35 | ||||||||||||
|
1333 |
1,300 | 2.92 | 2.48 | 3.78 | 0.54 | 0.54 | ||||||||||||
|
1426 |
1,200 | 4.86 | 4.00 | 5.40 | 0.43 | 1.08 | ||||||||||||
|
1437 |
1,400 | 3.89 | 3.35 | 3.46 | 0.27 | 0.97 | ||||||||||||
|
1510 |
1,100 | 2.43 | 2.16 | 3.51 | 0.86 | 0.65 | ||||||||||||
|
1522 |
900 | 3.24 | 2.92 | 4.10 | 0.43 | 0.54 | ||||||||||||
|
1573 |
3,400 | 1.94 | 1.73 | 2.70 | 0.81 | 0.54 | ||||||||||||
|
1626 |
1,400 | 5.08 | 5.62 | 6.48 | 0.54 | 1.08 | ||||||||||||
From the information above, determine the amount of Windsor Company
inventory.
| The amount of Windsor Company’s inventory | $enter the dollar amount of Windsor Company's inventory |
Solutions
Expert Solution
Solution
| The amount of Windsor Company’s inventory | $ 36,147 |
.
Working
| Product | Cost | Replacement cost | NRV | NRV-NP | Market | Per unit Inventory Value | Units | Lower of cost or realizable value |
| 1320 | $ 3.46 | $ 3.24 | $ 4.48 | $ 3.13 | $ 3.24 | $ 3.24 | 1,600 | $ 5,184.00 |
| 1333 | $ 2.92 | $ 2.48 | $ 3.24 | $ 2.70 | $ 2.70 | $ 2.70 | 1,300 | $ 3,510.00 |
| 1426 | $ 4.86 | $ 4.00 | $ 4.97 | $ 3.89 | $ 4.00 | $ 4.00 | 1,200 | $ 4,800.00 |
| 1437 | $ 3.89 | $ 3.35 | $ 3.19 | $ 2.22 | $ 3.19 | $ 3.19 | 1,400 | $ 4,466.00 |
| 1510 | $ 2.43 | $ 2.16 | $ 2.65 | $ 2.00 | $ 2.16 | $ 2.16 | 1,100 | $ 2,376.00 |
| 1522 | $ 3.24 | $ 2.92 | $ 3.67 | $ 3.13 | $ 3.13 | $ 3.13 | 900 | $ 2,817.00 |
| 1573 | $ 1.94 | $ 1.73 | $ 1.89 | $ 1.35 | $ 1.73 | $ 1.73 | 3,400 | $ 5,882.00 |
| 1626 | $ 5.08 | $ 5.62 | $ 5.94 | $ 4.86 | $ 5.62 | $ 5.08 | 1,400 | $ 7,112.00 |
| $ 36,147.00 |
Market value is calculated as
If we want to value inventory on the basis of lower of cost or market value then we have to first calculate market value.
To calculate market value an easy method is used in this question. We will take the middle value of the given below values to ascertain market value.
| Replacement value | NRV | NRV minus Normal Profits |
.
| Product | Estimated selling price (A) | Cost to complete and sell (B) | NRV (A-B) |
| 1320 | $ 4.86 | $ 0.38 | $ 4.48 |
| 1333 | $ 3.78 | $ 0.54 | $ 3.24 |
| 1426 | $ 5.40 | $ 0.43 | $ 4.97 |
| 1437 | $ 3.46 | $ 0.27 | $ 3.19 |
| 1510 | $ 3.51 | $ 0.86 | $ 2.65 |
| 1522 | $ 4.10 | $ 0.43 | $ 3.67 |
| 1573 | $ 2.70 | $ 0.81 | $ 1.89 |
| 1626 | $ 6.48 | $ 0.54 | $ 5.94 |
ekkarill92 answered 2 years agoRelated Solutions
Exercise 9-7 Ayayai Company follows the practice of pricing its inventory at the lower-of-cost-or-market, on an...
Exercise 9-7 Ayayai Company follows the practice of pricing its
inventory at the lower-of-cost-or-market, on an individual-item
basis.
item No.
Quantity
Cost per Unit
Cost to Replace
Estimated Selling Price
Cost of Completion and Disposal
Normal Profit
1320
1,400
$3.30
$3.09
$4.64
$0.36
$1.29
1333
1,100
2.78
2.37
3.61
0.52
0.52
1426
1,000
4.64
3.81
5.15
0.41
1.03
1437
1,200
3.71
3.19
3.30
0.26
0.93
1510
900
2.32
2.06
3.35
0.82
0.62
1522
700
3.09
2.78
3.91
0.41
0.52
1573...
Exercise 9-7 Sarasota Company follows the practice of pricing its inventory at the lower-of-cost-or-market, on an...
Exercise 9-7
Sarasota Company follows the practice of pricing its inventory
at the lower-of-cost-or-market, on an individual-item basis.
Item No.
Quantity
Cost per Unit
Cost to Replace
Estimated Selling Price
Cost of Completion and
Disposal
Normal Profit
1320
1,500
$3.39
$3.18
$4.77
$0.37
$1.33
1333
1,200
2.86
2.44
3.71
0.53
0.53
1426
1,100
4.77
3.92
5.3
0.42
1.06
1437
1,300
3.82
3.29
3.39
0.27
0.95
1510
1,000
2.39
2.12
3.45
0.85
0.64
1522
800
3.18
2.86
4.03
0.42
0.53
1573...
E9.7 (LO 2) (Lower-of-Cost-or-Market) Wangerin Company follows the practice of pricing its inventory at the lower‐of‐cost‐or‐market,...
E9.7 (LO 2)
(Lower-of-Cost-or-Market) Wangerin Company follows
the practice of pricing its inventory at the
lower‐of‐cost‐or‐market, on an individual-item basis.
Item No.
Quantity
Cost per Unit
Cost to Replace
Estimated Selling Price
Cost of Completion and Disposal
Normal Profit
1320
1,200
$3.20
$3.00
$4.50
$0.35
$1.25
1333
900
2.70
2.30
3.50
0.50
0.50
1426
800
4.50
3.70
5.00
0.40
1.00
1437
1,000
3.60
3.10
3.20
0.25
0.90
1510
700
2.25
2.00
3.25
0.80
0.60
1522
500
3.00
2.70
3.80
0.40...
Blue Company follows the practice of pricing its inventory at the lower-of-cost-or-market, on an individual-item basis....
Blue Company follows the practice of pricing its inventory at
the lower-of-cost-or-market, on an individual-item basis.
Item No.
Quantity
Cost per Unit
Cost to Replace
Estimated Selling Price
Cost of Completion and Disposal
Normal Profit
1320
1,300
$3.23
$3.03
$4.55
$0.35
$1.26
1333
1,000
2.73
2.32
3.54
0.51
0.51
1426
900
4.55
3.74
5.05
0.40
1.01
1437
1,100
3.64
3.13
3.23
0.25
0.91
1510
800
2.27
2.02
3.28
0.81
0.61
1522
600
3.03
2.73
3.84
0.40
0.51
1573
3,100
1.82...
Martinez Company follows the practice of pricing its inventory at the lower-of-cost-or-market, on an individual-item basis....
Martinez Company follows the practice of pricing its inventory
at the lower-of-cost-or-market, on an individual-item
basis.
Item No.
Quantity
Cost per Unit
Cost to Replace
Estimated Selling Price
Cost of Completion and Disposal
Normal Profit
1320
1,600
$3.46
$3.24
$4.86
$0.38
$1.35
1333
1,300
2.92
2.48
3.78
0.54
0.54
1426
1,200
4.86
4.00
5.40
0.43
1.08
1437
1,400
3.89
3.35
3.46
0.27
0.97
1510
1,100
2.43
2.16
3.51
0.86
0.65
1522
900
3.24
2.92
4.10
0.43
0.54
1573
3,400
1.94...
Martinez Company follows the practice of pricing its inventory at the lower-of-cost-or-market, on an individual-item basis....
Martinez Company follows the practice of pricing its inventory
at the lower-of-cost-or-market, on an individual-item
basis.
Item No.
Quantity
Cost per Unit
Cost to Replace
Estimated Selling Price
Cost of Completion and Disposal
Normal Profit
1320
1,600
$3.46
$3.24
$4.86
$0.38
$1.35
1333
1,300
2.92
2.48
3.78
0.54
0.54
1426
1,200
4.86
4.00
5.40
0.43
1.08
1437
1,400
3.89
3.35
3.46
0.27
0.97
1510
1,100
2.43
2.16
3.51
0.86
0.65
1522
900
3.24
2.92
4.10
0.43
0.54
1573
3,400
1.94...
Skysong Company follows the practice of pricing its inventory at the lower-of-cost-or-market, on an individual-item basis....
Skysong Company follows the practice of pricing its inventory at
the lower-of-cost-or-market, on an individual-item basis.
Item No.
Quantity
Cost per Unit
Cost to Replace
Estimated Selling Price
Cost of Completion and Disposal
Normal Profit
1320
1,500
$3.39
$3.18
$4.77
$0.37
$1.33
1333
1,200
2.86
2.44
3.71
0.53
0.53
1426
1,100
4.77
3.92
5.30
0.42
1.06
1437
1,300
3.82
3.29
3.39
0.27
0.95
1510
1,000
2.39
2.12
3.45
0.85
0.64
1522
800
3.18
2.86
4.03
0.42
0.53
1573
3,300
1.91...
Sarasota Company follows the practice of pricing its inventory at the lower-of-cost-or-market, on an individual-item basis....
Sarasota Company follows the practice of pricing its inventory
at the lower-of-cost-or-market, on an individual-item
basis.
Item No.
Quantity
Cost per Unit
Cost to Replace
Estimated Selling Price
Cost of Completion and Disposal
Normal Profit
1320
1,600
$3.42
$3.21
$4.82
$0.37
$1.34
1333
1,300
2.89
2.46
3.75
0.54
0.54
1426
1,200
4.82
3.96
5.35
0.43
1.07
1437
1,400
3.85
3.32
3.42
0.27
0.96
1510
1,100
2.41
2.14
3.48
0.86
0.64
1522
900
3.21
2.89
4.07
0.43
0.54
1573
3,400
1.93...
Michael Bolton Company follows the practice of pricing its inventory at the lower-of-cost-or-market, on an individual-item...
Michael Bolton Company follows the practice of pricing its
inventory at the lower-of-cost-or-market, on an individual-item
basis
Item No.
Quantity
Cost per Unit
Cost to Replace
Estimated Selling Price
Cost of Completion and Disposal
Normal Profit
1320
1700
5.98
5.61
8.42
0.65
2.34
1333
1400
5.05
4.30
6.55
0.94
0.94
1426
1300
8.42
6.92
9.35
0.75
1.87
From the information above, determine the amount of Bolton
Company inventory.
Swifty Company follows the practice of pricing its inventory at the lower-of-cost-or-market, on an individual-item basis....
Swifty Company follows the practice of pricing its inventory at
the lower-of-cost-or-market, on an individual-item basis.
Item No.
Quantity
Cost per Unit
Cost to Replace
Estimated Selling Price
Cost of Completion and Disposal
Normal Profit
1320
1,400
$3.30
$3.09
$4.64
$0.36
$1.29
1333
1,100
2.78
2.37
3.61
0.52
0.52
1426
1,000
4.64
3.81
5.15
0.41
1.03
1437
1,200
3.71
3.19
3.30
0.26
0.93
1510
900
2.32
2.06
3.35
0.82
0.62
1522
700
3.09
2.78
3.91
0.41
0.52
1573
3,200
1.85...
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