Lower of Cost or Market Yang Manufacturing sells a limited line of specially made products,...
60.1K
Verified Solution
Link Copied!
Question
Accounting
Lower of Cost or Market
Yang Manufacturing sells a limited line of specially made products, using television advertising campaigns in large cities. At year end, Yang has the following data for its inventory:
| Item | Number of Units | Historical Cost per Unit | Market Value per Unit | |||
| Phone | 600 | $24 | $18 | |||
| Stereo | 180 | 177 | 190 | |||
| Electric shaver | 220 | 30 | 35 | |||
| MP3 alarm clock | 430 | 26 | 25 | |||
| Handheld game system | 570 | 40 | 19 | |||
Required:
1. Compute the carrying value of the ending inventory using the lower of cost or market rule applied on an item-by-item basis. $
Feedback
1. Compare actual cost of inventory to its market value. The lower amount is the value of inventory. If market value is lower, the inventory account is adjusted.
2. Prepare the journal entry required to value the inventory at lower of cost or market.
| Cost of Goods Sold | |||
| Inventory | |||
| (Reduced inventory to 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!
Other questions asked by students
StudyZin's Question Purchase
1 Answer
$0.99
(Save $1 )
One time Pay
- No Ads
- Answer to 1 Question
- Get free Zin AI - 50 Thousand Words per Month
Unlimited
$4.99*
(Save $5 )
Billed Monthly
- No Ads
- Answers to Unlimited Questions
- Get free Zin AI - 3 Million Words per Month
*First month only
Free
$0
- Get this answer for free!
- Sign up now to unlock the answer instantly
You can see the logs in the Dashboard.