The inventory of 3T Company on December 31, 2014, consists of the following items.
accounting teacherE9-1 (Lower-of-Cost-or-Market) The inventory of 3T Company on December 31, 2014, consists of the following items.
Part No. | Quantity | Cost Per Unit | Cost to Replace per Unit |
110 | 600 | $90 | $100.00 |
111 | 1,000 | 60 | $52.00 |
112 | 500 | 80 | $76.00 |
113 | 200 | 170 | $180.00 |
120 | 400 | 205 | $208.00 |
121 | 1,600 | 16 | $14.00 |
122 | 300 | 240 | $235.00 |
Part No. 121 is obsolete and has a realizable value of each as scrap: $0.20
Part No. | Quantity | Per Unit | Market | Total Cost | Total | Lower of |
110 | 600 | $90 | $100.00 | |||
111 | 1,000 | 60 | 52.00 | |||
112 | 500 | 80 | 76.00 | |||
113 | 200 | 170 | 180.00 | |||
120 | 400 | 205 | 208.00 | |||
121 | 1,600 | 16 | 14.00 | |||
122 | 300 | 240 | $235.00 | |||
Totals |
Instructions:
Complete the table above by inserting the correct values or formulas into the yellow highlighted cells. From this data, answer the following two questions:
(a) Determine the inventory as of December 31, 2014, by the lower-of-cost-or-market method, applying this method directly to each item.
The valuation of inventory as of December 31, 2014, by the lower of cost or market method, as applied directly to each item is:
(b) Determine the inventory by the lower-of-cost-or-market method, applying the method to the total of the inventory.
The valuation of inventory as of December 31, 2014, by the lower of cost or market method, as applied to total inventory is:
11 years ago
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e9-1_3t_company.xls
