Question

whispering Company sells two types of pumps. One is large and is for commercial use. The other is smaller and is used in residential swimming pools. The following inventory data is available for the month of March. Price per Unit Units Total 222 $ 444 $ 98,568 $ 500 $ 527 $ 555 $ 277,500 $ 233,988 $ 184,815 555 $ 599 $ 633 $ 332,445 $ 281,052 444 555 Residential Pumps Inventory at Feb. 28: Purchases: March 10 March 20 March 30 Sales: March 15 March 25 Inventory at March 31: Commercial Pumps Inventory at Feb. 28: Purchases: March 3 March 12 March 21 Sales: March 18 March 29 Inventory at March 31: 666 $ 888 $ 591,408 666 $ 999 $ 1,055 $ 1,110 $ 665,334 $ 351,315 $ 616,050 ୨୨୨ 666 555 $ 1.199 $ 1,265 $ 1.197,801 $ 842,490 In addition to the above information, due to a downturn in the economy that has hit Whispering's commercial customers especially hard, Whispering expects commercial pump prices from March 31 onward to be considerably different (and lower) than at the beginning of and during March. Whispering has developed the following additional information.

Answer 1

Please find below inventory schedule and corresponding answers:

Answer to first question - lower of cost or NRV = $ 856,254

Answer to second question - lower of cost or Market = $ 758,857

Calculations are below:

Inventory schedule at FIFO Basis of Whispering Company for the month of March
Description	Residential pumps			Commercial pumps			Total Inventory
	Unit	Price Per unit	Total	Unit	Price Per unit	Total
Opening Inventory on Mar 1	222	444	98,568	666	888	591,408	689,976
Purchases
March 3				666	999	665,334	665,334
March 10	555	500	277,500				277,500
March 12				333	1,055	351,315	351,315
March 20	444	527	233,988				233,988
March 21				555	1,110	616,050	616,050
March 30	333	555	184,815				184,815
Sales @ FIFO Basis							-
March 15	-222	444	(98,568)				(98,568)
	-333	500	(166,500)				(166,500)
March 18				-666	888	(591,408)	(591,408)
				-333	999	(332,667)	(332,667)
March 25	-222	500	(111,000)				(111,000)
	-222	527	(116,994)				(116,994)
March 29				-333	999	(332,667)	(332,667)
				-333	1,055	(351,315)	(351,315)
Ending Inventory on Mar 31     (A)	555		301,809	555		616,050	917,859
Cost of Inventory        (A)			301,809			616,050	917,859
Net Realisable value (NRV)      (B)	555	644	357,420	555	999	554,445	911,865
Profit Margin @ 16.67% on cost (rounded off)			50,312			102,696	153,008
Market Value (NRV less profit)           ( C)			307,108			451,749	758,857
Whispering applies lower of cost or net realisable value at individual product level
Inventory to report in Balance sheet (Lower of A vs B)			301,809			554,445	856,254
Whispering applies lower of cost or market at Category level (both type of pumps under same category)
Inventory to report in Balance sheet (Lower of A vs C)							758,857