Question

A physical inventory of Liverpool Company taken at December 31 reveals the following Units Per Unit Cost Market $ 90 345 260 326 $ 98 100 Item Audio equipment Receivers CD players MP3 players Speakers Video equipment Handheld LCDs VCRS Camcorders Car audio equipment Satellite radios CD/MP3 radios 212 310 322 Required: 1. Calculate the lower of cost or market for the inventory applied separately to each item. Total Per Unit Cost Market LCM applied to Individual Items Cost Market Units Item 90.00 345 260 Audio equipment Receivers CD players MP3 players Speakers Video equipment Handheld LCDs 326 98.00 100.00 95.00 41.00 111.00 86.00 52.00 204 480 150.00 125.00

Answer 1

		Per Unit		Total		LCM applies to
Item	Units	Cost	Market	Cost ( Units x Cost)	Market (Units x Market)		Individual Item
Audio equipment
Receivers	345	90	98	31,050	33,810		31,050
CD players	260	111	100	28,860	26,000		26,000
MP3 players	326	86	95	28,036	30,970		28,036
Speakers	204	52	41	10,608	8,364		8,364
Video Equipment
Handed LCDs	480	150	125	72,000	60,000		60,000
VCRs	291	93	84	27,063	24,444		24,444
Camooders	212	310	322	65,720	68,264		65,720
Car audio equipment
Satelite radios	185	70	84	12,950	15,540		12,950
CD/MP3 radios	170	97	105	16,490	17,850		16,490

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