Question

In: Accounting

On the basis of the following data, determine the value of the inventory at the lower...

On the basis of the following data, determine the value of the inventory at the lower of cost or market. Assemble the data in the form illustrated in Exhibit 10.

Product

Inventory
Quantity

Cost Per
Unit


Market Value per Unit
(Net Realizable Value)

Class 1:
Model A 26 $295 $271
Model B 15   121 97
Model C 45 46   61
Class 2:
Model D 29   78   73
Model E 34 174 166

a. Determine the value of the inventory at the lower of cost or market applied to each item in the inventory.

Inventory at the Lower of Cost or Market



Product

Inventory
Quantity

Cost
per Unit
Market Value
per Unit
(Net Realizable Value)
Cost Market Lower of Cost or Market
Model A fill in the blank 333f6a014067068_1 $fill in the blank 333f6a014067068_2 $fill in the blank 333f6a014067068_3 $fill in the blank 333f6a014067068_4 $fill in the blank 333f6a014067068_5 $fill in the blank 333f6a014067068_6
Model B fill in the blank 333f6a014067068_7 fill in the blank 333f6a014067068_8 fill in the blank 333f6a014067068_9 fill in the blank 333f6a014067068_10 fill in the blank 333f6a014067068_11 fill in the blank 333f6a014067068_12
Model C fill in the blank 333f6a014067068_13 fill in the blank 333f6a014067068_14 fill in the blank 333f6a014067068_15 fill in the blank 333f6a014067068_16 fill in the blank 333f6a014067068_17 fill in the blank 333f6a014067068_18
Model D fill in the blank 333f6a014067068_19 fill in the blank 333f6a014067068_20 fill in the blank 333f6a014067068_21 fill in the blank 333f6a014067068_22 fill in the blank 333f6a014067068_23 fill in the blank 333f6a014067068_24
Model E fill in the blank 333f6a014067068_25 fill in the blank 333f6a014067068_26 fill in the blank 333f6a014067068_27 fill in the blank 333f6a014067068_28 fill in the blank 333f6a014067068_29 fill in the blank 333f6a014067068_30
Total $fill in the blank 333f6a014067068_31 $fill in the blank 333f6a014067068_32 $fill in the blank 333f6a014067068_33

b. Determine the value of the inventory at the lower of cost or market applied to each class of inventory.

Inventory at the
Lower of Cost
or Market



Product

Inventory
Quantity
Cost
per Unit
Market Value
per Unit
(Net Realizable Value)
Cost Market Lower of Cost or Market
Class 1:
Model A fill in the blank 17b7d5004063fd6_1 $fill in the blank 17b7d5004063fd6_2 $fill in the blank 17b7d5004063fd6_3 $fill in the blank 17b7d5004063fd6_4 $fill in the blank 17b7d5004063fd6_5
Model B fill in the blank 17b7d5004063fd6_6 fill in the blank 17b7d5004063fd6_7 fill in the blank 17b7d5004063fd6_8 fill in the blank 17b7d5004063fd6_9 fill in the blank 17b7d5004063fd6_10
Model C fill in the blank 17b7d5004063fd6_11 fill in the blank 17b7d5004063fd6_12 fill in the blank 17b7d5004063fd6_13 fill in the blank 17b7d5004063fd6_14 fill in the blank 17b7d5004063fd6_15
Subtotal $fill in the blank 17b7d5004063fd6_16 $fill in the blank 17b7d5004063fd6_17 $fill in the blank 17b7d5004063fd6_18
Class 2:
Model D fill in the blank 17b7d5004063fd6_19 fill in the blank 17b7d5004063fd6_20 fill in the blank 17b7d5004063fd6_21 $fill in the blank 17b7d5004063fd6_22 $fill in the blank 17b7d5004063fd6_23
Model E fill in the blank 17b7d5004063fd6_24 fill in the blank 17b7d5004063fd6_25 fill in the blank 17b7d5004063fd6_26 fill in the blank 17b7d5004063fd6_27 fill in the blank 17b7d5004063fd6_28
Subtotal $fill in the blank 17b7d5004063fd6_29 $fill in the blank 17b7d5004063fd6_30 fill in the blank 17b7d5004063fd6_31
Total $fill in the blank 17b7d5004063fd6_32 $fill in the blank 17b7d5004063fd6_33 $fill in the blank 17b7d5004063fd6_34

c. Determine the value of the inventory at the lower of cost or market applied to total inventory.

Inventory at the Lower of Cost or Market



Product

Inventory
Quantity

Cost
per Unit
Market Value
per Unit
(Net Realizable Value)
Cost Market Lower of Cost or Market
Model A fill in the blank 1602edfba07bf98_1 $fill in the blank 1602edfba07bf98_2 $fill in the blank 1602edfba07bf98_3 $fill in the blank 1602edfba07bf98_4 $fill in the blank 1602edfba07bf98_5
Model B fill in the blank 1602edfba07bf98_6 fill in the blank 1602edfba07bf98_7 fill in the blank 1602edfba07bf98_8 fill in the blank 1602edfba07bf98_9 fill in the blank 1602edfba07bf98_10
Model C fill in the blank 1602edfba07bf98_11 fill in the blank 1602edfba07bf98_12 fill in the blank 1602edfba07bf98_13 fill in the blank 1602edfba07bf98_14 fill in the blank 1602edfba07bf98_15
Model D fill in the blank 1602edfba07bf98_16 fill in the blank 1602edfba07bf98_17 fill in the blank 1602edfba07bf98_18 fill in the blank 1602edfba07bf98_19 fill in the blank 1602edfba07bf98_20
Model E fill in the blank 1602edfba07bf98_21 fill in the blank 1602edfba07bf98_22 fill in the blank 1602edfba07bf98_23 fill in the blank 1602edfba07bf98_24 fill in the blank 1602edfba07bf98_25
Total $fill in the blank 1602edfba07bf98_26 $fill in the blank 1602edfba07bf98_27 $fill in the blank 1602edfba07bf98_28

Solutions

Expert Solution

Solution

(a) each item of inventory

Product Quantity Cost per unit Total Cost NRV per unit Total NRV Value of Inventory
Class 1
Model A 26 $ 295 $ 7,670 $ 271 $ 7,046 $ 7,046
Model B 15 $ 121 $ 1,815 $ 97 $ 1,455 $ 1,455
Model C 45 $ 46 $ 2,070 $ 61 $ 2,745 $ 2,070
Class 2
Model D 29 $ 78 $ 2,262 $ 73 $ 2,117 $ 2,117
Model E 34 $               174 $         5,916 $ 166 $ 5,644 $         5,644
Total Value of Inventory $ 18,332

(b) each class of inventory

Product Quantity Cost per unit Total Cost NRV per unit Total NRV Value of Inventory
Class 1
Model A 26 $ 295 $ 7,670 $ 271 $ 7,046
Model B 15 $ 121 $ 1,815 $ 97 $ 1,455
Model C 45 $ 46 $ 2,070 $ 61 $ 2,745
Total Class 1 $ 11,555 $      11,246 $ 11,246
Class 2
Model D 29 $ 78 $ 2,262 $ 73 $ 2,117
Model E 34 $               174 $         5,916 $ 166 $ 5,644
Total Class 2 $ 8,178 $ 7,761 $ 7,761
Total Value of Inventory $ 19,007

(c) Total Inventory

Product Quantity Cost per unit Total Cost NRV per unit Total NRV Value of Inventory
Class 1
Model A 26 $ 295 $ 7,670 $ 271 $ 7,046
Model B 15 $ 121 $ 1,815 $ 97 $ 1,455
Model C 45 $ 46 $ 2,070 $ 61 $ 2,745
Total Class 1 $ 11,555 $      11,246
Class 2
Model D 29 $ 78 $ 2,262 $ 73 $ 2,117
Model E 34 $               174 $         5,916 $ 166 $ 5,644
Total Class 2 $ 8,178 $ 7,761
Total Value of Inventory $ 19,733 $ 19,007 $ 19,007

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