USA: +1 725-224-8795 
Sign in
E7-11 Reporting Inventory at Lower of Cost or Market [LO 7-4]
| Sandals Company is preparing the annual financial statements dated December 31. Ending inventory information about the four major items stocked for regular sale follows: |
Don't use plagiarized sources. Get Your Custom Essay on
Question & Answer: E7-11 Reporting Inventory at Lower of Cost or Market [LO 7-4]…..
GET AN ESSAY WRITTEN FOR YOU FROM AS LOW AS $13/PAGE
| Product Line | Quantity on Hand |
Unit Cost When Acquired (FIFO) | Market Value at Year-End |
||||||
| Air Flow | 20 | $ | 12 | $ | 14 | ||||
| Blister Buster | 75 | 40 | 38 | ||||||
| Coolonite | 35 | 55 | 50 | ||||||
| Dudesly | 10 | 30 | 35 | ||||||
| Required: |
| 1. | Compute the amount that should be reported for the ending inventory using the LCM rule applied to each item. |
Expert Answer
1. Amount to be reported for each item:
| Product Line | Quantity on Hand | Cost | Market Value | Amount to be reported |
| $ | $ | $ | ||
| Air Flow | 20 | 240 | 280 | 240 |
| Blister Buster | 75 | 3000 | 2850 | 2850 |
| Coolonite | 35 | 1925 | 1750 | 1750 |
| Dudesly | 10 | 300 | 350 | 350 |
| 5465 | 5230 | 5190 |
Value of ending inventory to be reported: $ 5190
