Exercise 6-56 (Algorithmic) Lower of Cost or Market per Unit Han Sales and Services has...
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Accounting
Exercise 6-56 (Algorithmic) Lower of Cost or Market per Unit Han Sales and Services has the following data for the items in its inventory at the end of the accounting period: Item Number Historical Selling Price Disposal of Units Cost per Unit Costs Window air conditioner 23 $194 $110 $50 Dishwasher 34 260 380 24 Refrigerator 25 382 605 25 Microwave 19 215 180 15 Washer (clothing) 36 185 290 43 Dryer (clothing) 25 168 245 50 Required: 1. Compute the carrying value of ending inventory using the lower of cost or market rule applied on an item-by-item basis. 2. Prepare the journal entry required to value the inventory at lower of cost or market. (Inventory adjustment to market value)
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