Lower of Cost or Market
Stiles Corporation uses the lower of cost or market rule for each of two products in its ending inventory. A profit margin of 30% on the selling price is considered normal for each product. Specific data for each product are as follows:
Product A | Product B | |
---|---|---|
Historical cost | $80 | $96 |
Replacement cost | 70 | 98 |
Estimated cost of disposal | 32 | 30 |
Estimated selling price | 150 | 120 |
Required:
Product A | $ per unit |
Product B | $ per unit |
Product A | $ per unit |
Product B | $ per unit |
Fill in the blanks using either celling, floor or profit(only choose one)
For Product A, the use of a ______________________ constraint prevents an excessive write-down of inventory. If the ______________constraint were not imposed, an excessive loss would be recognized in the period of the write-down followed by an excessive profit in future periods. Therefore, the imposition of the _______________constraint prevents the profit distortion that would occur by an understatement of inventory and overstatement of losses in the current period.For Product B, the use of a " __________________" constraint prevents inventory from being valued at an amount that exceeds the amount the company could realize by seliling it.
Lower of Cost or Market Stiles Corporation uses the lower of cost or market rule for...
Stiles Corporation uses the lower of cost or market rule for each of two products in its ending inventory. A profit margin of 30% on the selling price is considered normal for each product. Specific data for each product are as follows: product A Product B Historical cost $80 $95 replacement cost $70 $98 estimated cost of disposal $32 $30 estimated selling price $150 $120 Assume that Stiles uses the FIFO inventory method. What is the correct inventory value for...
Inventory Write-Down Stiles Corporation uses the FIFO cost flow assumption and is in the process of applying the LCNRV rule for each of two products in its ending inventory. A profit margin of 30% on the selling price is considered normal for each product Specific data for each product are as follows: Historical cost Product A Product B $80 $96 Replacement cost 98 Estimated cost of disposal Estimated selling price 30 150 120 Required: What is the correct inventory value...
Inventory Write-Down Stiles Corporation uses the FIFO cost flow assumption and is in the process of applying the LCNRV rule for each of two products in its ending inventory. A profit margin of 30% on the selling pric considered normal for each product Specific data for each product are as follows: Product A Product B Historical cost $80 $95 Replacement cost 31 Estimated cost of disposal Estimated selling price 150 Required: What is the correct inventory value for each product?...
Inventory Write-Down Stiles Corporation uses the FIFO cost flow assumption and is in the process of applying the LCNRV rule for each of two products in its ending inventory. A profit margin of 30% on the selling price is considered normal for each product Specific data for each product are as follows: Product A Product B $81 $96 71 9 98 Historical cost Replacement cost Estimated cost of disposal Estimated selling price 32 25 150 120 Required: What is the...
Inventory Write-Down Stiles Corporation uses the FIFO cost flow assumption and is in the process of applying the LCNRV rule for each of two products in its ending inventory. A profit margin of 30% on the selling price is considered normal for each product. Specific data for each product are as follows: Product A Product B Historical cost $80 $95 Replacement cost 71 99 Estimated cost of disposal 32 27 Estimated selling price 150 120 Required: What is the correct...
(8 points) Smashing Pumpkins Company uses the lower-of-cost-or-market method, on an individual-item basis, in pricing its inventory items. The inventory at December 31, 2014, consists of products D, E, F, G, H, and I. Relevant per-unit data for these products appear below. Item D Item E Item F Item G Item H Item I Estimated selling price $130 $100 $90 $85 $105 $80 Cost 70 80 60 80 45 32 Replacement cost 110 65 70 30 70 30 Estimated selling...
3. (8 points) Smashing Pumpkins Company uses the lower-of-cost-or-market method, on an individual-item basis, in pricing its inventory items. The inventory at December 31, 2014, consists of products D, E, F, G, H, and I. Relevant per-unit data for these products appear below. Item D Item E Item F Item G Item H Item I Estimated selling price $130 $100 $90 $85 $105 $80 Cost 70 80 60 80 45 32 Replacement cost 110 65 70 30 70 30 Estimated...
3. (8 points) Smashing Pumpkins Company uses the lower-of-cost-or-market method, on an individual-item basis, in pricing its inventory items. The inventory at December 31, 2014, consists of products D, E, F, G, H, and I. Relevant per-unit data for these products appear below. Item D Item E Item F Item G Item H Item I Estimated selling price $130 $100 $90 $85 $105 $80 70 80 60 80 Cost 45 32 Replacement cost Estimated selling expense Normal profit 110 65...
Moore Corporation uses the com LO imp Ald ADA cation uses the FIFO cost flow method and has numerous units of two products ding inventory. Each is accounted for at the lower of cost or net realizable value under inting Standards Update (ASU) 2015-11. A profit margin of 30% on selling price is considered normal for each product. Specific data with respect to each product follows: Product 1 Product 2 Historical cost $ 17 $ 45 Replacement cost Estimated cost...
Brief Exercise 9-4 Lower of cost or market (LO9-1] 0.71 points 07 se SLR Corporation has 1,000 units of each of its two products in its year-end inventory. Per unit data for each of the products are as follows: corporation has 19000 units Product 1 Product 2 Cost Replacement cost Selling price Selling costs Normal profit margin O COO bolo # 00 Determine the balance sheet carrying value of SLR's inventory assuming that the lower of cost or market (LCM)...