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homework%20solutions%20chapters%209 - E9-1Replacement Net...

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Unformatted text preview: E9-1Replacement Net RealizableNet Realizable Value LessProductCost Cost Value (Ceiling) Normal Markup (floor) A$68 $60$140 - $32 = $108$108 - 30% ($140) = $66a B$91 $93a$200 - $52 = $148$148 - 30% ($200) = $88aDesignated market valueInventory valuation:Product A--$66Net realizable value less a normal markup is used because replacement cost is less than the floor and net realizable value less a normal markup is less than cost.Product B--$91Cost is used here because replacement cost, which is between the ceiling and floor, is higher than the cost.E9-3Lower of Cost1.ProductUnits or Market Inventory ValueA 600 $ 0.80 $ 480B 250 $ 1.50 375C 150 $ 5.00 750D 100 $ 6.40 640E 80 $24.60 1,968 Total inventory value $4,213E9-3 (continued)2. Lower of CostProduct Cost Market or Market Group 1A600 $600 $480.00B250 375 387.50Total $975 $867.50 $ 867.50 Group 2C 150 $ 750 $ 787.50D 100 650 640.00 $1,400 $1,427.50 $1,400.00$1,400....
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This note was uploaded on 04/17/2008 for the course ACCT 3110 taught by Professor Stanwick during the Spring '08 term at Auburn University.

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homework%20solutions%20chapters%209 - E9-1Replacement Net...

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