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Larkspur, Inc. values its inventory at the lower-of-LIFO-cost-or-market. The following information is available from the company’s...

Larkspur, Inc. values its inventory at the lower-of-LIFO-cost-or-market. The following information is available from the company’s inventory records as of December 31, 2020.

Item

Quantity

Unit
Cost

Replacement
Cost/Unit

Estimated Selling
Price/Unit

Completion & Disposal
Cost/Unit

Normal Profit
Margin/Unit

X490 12,444 $15.25 $14.58 $17.08 $3.66 $4.15
X512 6,039 8.54 9.15 10.86 0.31 2.20
X682 21,960 23.18 22.69 38.49 3.97 10.98
Z195 15,250 17.39 17.08 24.16 1.71 7.02
Z846 10,492 14.64 15.56 17.02 2.56 1.34

Calculate the lower-of-cost-or-market using the individual-item approach. (Round answers to 2 decimal places, e.g. 52.75.)

Lower-of-Cost-or-Market
(Per unit basis)

X490

$enter a dollar amount

X512

$enter a dollar amount

X682

$enter a dollar amount

X195

$enter a dollar amount

X846

$enter a dollar amount

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List of Accounts

  

  

Show the journal entries Larkspur, Inc. will need to make in order to write down the ending inventory from cost to market. Assume this is Larkspur’s first year of operations. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to 0 decimal places, e.g. 5,275.)

Account Titles and Explanation

Debit

Credit

Cost of Goods sold Method:

enter an account title

enter a debit amount

enter a credit amount

enter an account title

enter a debit amount

enter a credit amount

Loss method:

enter an account title

enter a debit amount

enter a credit amount

enter an account title

enter a debit amount

enter a credit amount

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