Question

The Jewel Fool had the following inventory items on hand at the end of the year. Quantity 30 Necklaces Bracelets Cost per Item $71 Value per Item $ 66 Se 36 56 Determine the lower of cost or market/net realizable value per unit and the total amount that should be reported on the balance sheet for each item of inventory. Lower of Cost or Market per Unit Total Amount Reported Necklaces Bracelets Total

Answer 1

Solution:

Statement showing calculation:

	Cost per Item (1)	Market value per item (2)	Lower of Cost and Market value (3) = Lower of (1) and (2)	Quantity (4)	Total amount reported (5) = (3)*(4)
Necklaces	$ 71	$ 66	$ 66	10	$ 660
Bracelets	$ 36	$ 56	$ 36	50	$ 1,800
Total = $ 660 + $ 1,800 = $ 2,460					$ 2,460

Thus Final Solution is

	Lower of cost or Market per unit	Total amount reported
Necklaces	$ 66	$ 660
Bracelets	$ 36	$ 1,800
Total		$ 2,460