CSecure | https/ledugen. wileyplus.com/edugen/student/maintr.uni NMENT RESOURCES
ID: 2583454 • Letter: C
Question
CSecure | https/ledugen. wileyplus.com/edugen/student/maintr.uni NMENT RESOURCES of Copy of ChaptrExercise 9-2 Smashing Pumpkins Company uses the lower-of-cost-or-market method, on an individual-item basis, in pricing ts inventory items. The inventory at December 31, 2014, consists of products D, E, F, G, H, and I. Relevant per-unit data for these products appear below Item D Item E Item F Item G Item H Item $218 $200 $173 $164$200 $164 218 131 127 55 12755 36 36 36 137 146 146 91 Replacement cost Normal profit 2014, for each of the it Item D Item E 3 36 lower-of-cost-or-market rule, determine the proper unit value for balance sheet reporting purposes at December 31, items above. tem G s Click if you would like to Show Work for this question:Explanation / Answer
Unit Value as per Lower of Cost or Market rule Item D Item E Item F Item G Item H Item I Selling Price $ 218 $ 200 $ 173 $ 164 $ 200 $ 164 Less: Selling expenses $ 55 $ 55 $ 55 $ 46 $ 55 $ 55 Upper NRV [A] $ 163 $ 145 $ 118 $ 118 $ 145 $ 109 Replacement Cost [B] $ 218 $ 131 $ 127 $ 55 $ 127 $ 55 Upper NRV (1) $ 163 $ 145 $ 118 $ 118 $ 145 $ 109 Selling Price $ 218 $ 200 $ 173 $ 164 $ 200 $ 164 Less: Replacement Cost $ 218 $ 131 $ 127 $ 55 $ 127 $ 55 Normal Profit (2) $ - $ 69 $ 46 $ 109 $ 73 $ 109 Lower NRV (1-2) [C] $ 163 $ 76 $ 72 $ 9 $ 72 $ - Unit Value { [A], [B] or [C], whichever is lower} $ 163 $ 76 $ 72 $ 9 $ 72 $ -