Question
In: Accounting
Presented below is information related to Bonita Inc.’s inventory, assuming Bonita uses lower-of-LIFO cost-or-market. (per unit)...
Presented below is information related to Bonita Inc.’s
inventory, assuming Bonita uses lower-of-LIFO
cost-or-market.
|
(per unit) |
Skis |
Boots |
Parkas |
|||
|---|---|---|---|---|---|---|
|
Historical cost |
$224.20 |
$125.08 |
$62.54 |
|||
|
Selling price |
250.16 |
171.10 |
87.03 |
|||
|
Cost to distribute |
22.42 |
9.44 |
2.95 |
|||
|
Current replacement cost |
239.54 |
123.90 |
60.18 |
|||
|
Normal profit margin |
37.76 |
34.22 |
25.08 |
Determine the following:
(a) The two limits to market value (i.e., the
ceiling and the floor) that should be used in the
lower-of-cost-or-market computation for skis. (Round
answers to 2 decimal places, e.g. 52.75.)
|
Ceiling Limit |
$ |
|
|---|---|---|
|
Floor Limit |
$ |
(b) The amount that should be used in the
lower-of-cost-or-market comparison of boots. (Round
answers to 2 decimal places, e.g. 52.75.)
|
$ |
(c) The amount that should be used to value parkas
on the basis of the lower-of-cost-or-market. (Round
answers to 2 decimal places, e.g. 52.75.)
Solutions
Expert Solution
| a) | Skis | ||||||
| Ceiling | |||||||
| Selling price | 250.16 | ||||||
| less:cost to distribute | -22.42 | ||||||
| Ceiling | 227.74 | answer | |||||
| Floor | |||||||
| NRV | 227.74 | ||||||
| less:normal profit margin | -37.76 | ||||||
| Floor | 189.98 | answer | |||||
| b) | Boots | ||||||
| Ceiling | |||||||
| Selling price | 171.1 | ||||||
| less:cost to distribute | -9.44 | ||||||
| Ceiling | 161.66 | ||||||
| Floor | |||||||
| NRV | 161.66 | ||||||
| less:normal profit margin | -34.22 | ||||||
| Floor | 127.44 | ||||||
| Cost | Replacement | ceiling | Floor | MV | LCM | ||
| 125.08 | 123.9 | 161.66 | 127.44 | 127.44 | 125.08 | ||
| Answer | 125.08 | ||||||
| c) | Parkas | ||||||
| Ceiling | |||||||
| Selling price | 87.03 | ||||||
| less:cost to distribute | -2.95 | ||||||
| Ceiling | 84.08 | ||||||
| Floor | |||||||
| NRV | 84.08 | ||||||
| less:normal profit margin | -25.08 | ||||||
| Floor | 59 | ||||||
| Cost | Replacement | ceiling | Floor | MV | LCM | ||
| 62.54 | 60.18 | 84.08 | 59 | 60.18 | 60.18 | ||
| Answer | 60.18 | ||||||
ekkarill92 answered 2 years agoRelated Solutions
Presented below is information related to Sheffield Inc.’s inventory, assuming Sheffield uses lower-of-LIFO cost-or-market. (per unit)...
Presented below is information related to Sheffield Inc.’s
inventory, assuming Sheffield uses lower-of-LIFO
cost-or-market.
(per unit)
Skis
Boots
Parkas
Historical cost
$254.60
$142.04
$71.02
Selling price
284.08
194.30
98.83
Cost to distribute
25.46
10.72
3.35
Current replacement cost
272.02
140.70
68.34
Normal profit margin
42.88
38.86
28.48
Determine the following:
(a) The two limits to market value (i.e., the
ceiling and the floor) that should be used in the
lower-of-cost-or-market computation for skis. (Round
answers to 2 decimal places, e.g....
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...
Teal Mountain, Inc. values its inventory at the lower-of-LIFO-cost-or-market. The following information is available from the...
Teal Mountain, 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
11,832
$14.50
$13.86
$16.24
$3.48
$3.94
X512
5,742
8.12
8.70
10.32
0.29
2.09
X682
20,880
22.04
21.58
36.60
3.77
10.44
Z195
14,500
16.53
16.24
22.97
1.62
6.67
Z846
9,976
13.92
14.79
16.18
2.44
1.28
(a)
Partially correct answer iconYour...
Lower-of-Cost-or-Market Inventory On the basis of the following data: Product Inventory Quantity Cost per Unit Market...
Lower-of-Cost-or-Market Inventory
On the basis of the following data:
Product
Inventory
Quantity
Cost per
Unit
Market Value per Unit
(Net Realizable Value)
Model A
13
$198
$223
Model B
42
63
56
Model C
36
126
144
Model D
13
241
237
Model E
33
144
152
Determine the value of the inventory at the lower of cost or
market. Assemble the data in the form illustrated in Exhibit 9.
Inventory at the Lower of Cost or Market
Product
Total...
Lower-of-Cost-or-Market Inventory On the basis of the following data: Product Inventory Quantity Cost per Unit Market...
Lower-of-Cost-or-Market Inventory
On the basis of the following data:
Product
Inventory
Quantity
Cost per
Unit
Market Value per Unit
(Net Realizable Value)
Model A
12
$106
$102
Model B
45
84
70
Model C
36
254
243
Model D
31
85
88
Model E
41
132
148
Determine the value of the inventory at the lower of cost or
market. Assemble the data in the form illustrated in Exhibit 9.
Inventory at
the Lower of Cost or Market
Product
Total...
Exercise 9-27 Presented below is information related to Sandhill Corporation. Price Index LIFO Cost Retail Inventory...
Exercise 9-27
Presented below is information related to Sandhill Corporation.
Price Index LIFO Cost Retail Inventory on December 31, 2017, when
dollar-value LIFO is adopted 100 $36,600 $69,100 Inventory,
December 31, 2018 110 ? 95,260 Compute the ending inventory under
the dollar-value LIFO method at December 31, 2018. The
cost-to-retail ratio for 2018 was 60%. Ending inventory under the
dollar-value LIFO method at December 31, 2018
Presented below is information related to equipment owned by Bonita Company at December 31, 2020. Cost...
Presented below is information related to equipment owned by
Bonita Company at December 31, 2020.
Cost
$9,810,000
Accumulated depreciation to
date
1,090,000
Expected future net cash flows
7,630,000
Fair value
5,232,000
Bonita intends to dispose of the equipment in the coming year. It
is expected that the cost of disposal will be $21,800. As of
December 31, 2020, the equipment has a remaining useful life of 4
years.
Prepare the journal entry (if any) to record the impairment of
the...
Presented below is information related to equipment owned by Bonita Company at December 31, 2020. Cost...
Presented below is information related to equipment owned by
Bonita Company at December 31, 2020. Cost $9,810,000 Accumulated
depreciation to date 1,090,000 Expected future net cash flows
7,630,000 Fair value 5,232,000 Bonita intends to dispose of the
equipment in the coming year. It is expected that the cost of
disposal will be $21,800. As of December 31, 2020, the equipment
has a remaining useful life of 4 years. Partially correct answer
iconYour answer is partially correct. Prepare the journal entry...
Lower-of-Cost-or-Market Method On the basis of the following data: Item Inventory Quantity Cost per Unit Market...
Lower-of-Cost-or-Market MethodOn the basis of the following data: $$ \begin{array}{lccc} \text { Item } & \text { Inventory Quantity } & \text { Cost per Unit } & \begin{array}{l} \text { Market Value per Unit } \\ \text { (Net Realizable Value) } \end{array} \\ \hline \text { JFW1 } & 6,330 & \$ 10 & \$ 11 \\ \text { SAW9 } & 1,140 & 36 & 34 \end{array} $$Determine the value of the inventory at the lower-of-cost-or-market by applying...
Presented below is information related to Marin, Inc. Cost Retail Beginning inventory $331,500 $585,000 Purchases 1,482,000...
Presented below is information related to Marin, Inc.
Cost
Retail
Beginning
inventory
$331,500
$585,000
Purchases
1,482,000
2,613,000
Freight on
purchases
63,180
Markups
136,500
Markup
cancellations
109,200
Abnormal
shortage
11,700
20,280
Markdowns
68,640
Markdown
cancellations
9,360
Employee
discounts
4,056
Sales revenue
2,788,500
Sales returns
78,000
Normal
shortage
13,650
Purchase
returns
17,160
31,980
Compute ending inventory by the conventional retail inventory
method. (Round percentages for computational purposes
to 1 decimal place, e.g. 0.4158 to 41.6% and final answer to 0
decimal places,...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- What 2 things happen to the melting point of a solid when an impurity is present?
- How Can Hominin Evolution be characterized as " mosaic evolution" Use examples of species from the...
- Absorption and Variable Costing Income Statements for Two Months and Analysis During the first month of...
- Mobile and wireless devices are being increasingly used in the Business Administration and Management Industry. write...
- What are the options that might be considered in relation to introducing flexible work practices? What...
- Question 2 : Aggregate Scores: Write a program that opens 2 files, quiz.txt, and hw.txt. The...
- Define the term symbiosis specifically as it applies in a biological context. Compare and contrast parasitism,...
ADVERTISEMENT