In: Accounting
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 |
Cost Per |
|
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 |
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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