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  3. question #5 madison co. has determined its year-

Question #5 Madison Co. has determined its year-end inventory on a LIFO basis...

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Accounting

Question #5
Madison Co. has determined its year-end inventory on a LIFO basis to be $600,000. Information
pertaining to that inventory is as follows:
Selling price
Costs to sell
Normal profit margin
Replacement cost
$720,000
30,000
80,000
620,000
Based on the Lower of Cost or Market Value, what should be the reported value of Madison's
inventory?
Question #6
On July 8, a fire destroyed the entire merchandise inventory on hand at Andover Wholesale
Corporation. The following information is available:
Sales, January 1 through July 8
$700,000
Inventory, January 1
130,000
Purchases, January 1 through July 8
640,000
Gross profit ratio
30%
Based on the Gross Profit Method, what is the estimated inventory on July 8 immediately prior
to the fire?
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