Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. an analysis of the inventory owned by owens compan

An analysis of the inventory owned by Owens Company as of the Company’s fiscal closing date...

Free

90.2K

Verified Solution

Question

Accounting

An analysis of the inventory owned by Owens Company as of theCompany’s fiscal closing date is shown in the following table.

ItemQuantityCost per
Unit		Market Value
per Unit
A200$20$17
B190$50$52
C400$34$30
D320$25$29

Assuming Owens applies the lower-of-cost-or-market rule on anindividual basis, the Company would be required to recognize anexpense amounting to

Multiple Choice

$1,660.

$2,200.

$3,860.

$540.

Answer & Explanation Solved by verified expert
4.4 Ratings (733 Votes)

Correct answer---$2200

Inventory value

Total Inventory Cost

Expense to be recognized

Items

Cost per unit

Market value per unit

Per Unit as per Lower of cost or market value

Number of units

Total Value

A

$      20.00

$    17.00

$         17.00

200

$       3,400.00

$     4,000.00

$     600.00

B

$      50.00

$    52.00

$         52.00

190

$       9,880.00

$     9,500.00

C

$      34.00

$    30.00

$         30.00

400

$     12,000.00

$ 13,600.00

$ 1,600.00

D

$      25.00

$    29.00

$         29.00

320

$       9,280.00

$     8,000.00

Total

$     34,560.00

$ 35,100.00

$ 2,200.00

Expense will be recorded only when cost is lower than market value.
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Basic Math
1.2K views

GRAPHS AND FUI Naming the qua Name the quadrant or a Point A

Advance Math
1.2K views

Solve the following initial value: y ''+ 4y = 2 cos 2t, y(0) = −2 and...

Biology
1.2K views

what three types of stimulation lead to hormone release? Give examples.

Physics
1.2K views

A satellite of mass m is in a circular orbit of radius r about a...

Physics
1.2K views

2 Assertion The work done by the radial force acting on a particle when doing...

Basic Math
1.2K views

A teacher asked 18 students how many books they read last summer The dot plot...

Basic Math
1.2K views

There was a sample of 700 milligrams of a radioactive substance to start a study....

Statistics
1.2K views

how many ways can 5 oaks 2 pines and 3 maples be arranged along a...

Calculus
1.2K views

Consider the cost function C x 1x where x is the number of product units...

Accounting
1.2K views

Imagine being a cost accountant with the goals to calculate manufacturing...

Accounting
1.2K views

Mann Corp.s liability account balances at June 30, Year 2, included a 10% note payable...

Accounting
1.2K views

Suppose that Best Buy issued $670000 of 8%,5-year bonds at 104 . Assuming straight-line amortization...