510chapter9fall2009afterclass1282009

510chapter9fall2009afterclass1282009 - Chapter 9...

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Chapter 9: Inventories: Chapter 9: Inventories: Additional Valuation Issues Additional Valuation Issues
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P9-1 Remmers Company manufactures desks. The company attempts to obtain a 20% gross margin on selling price. At December 31, 2010, the following finished desks appear in the company’s inventory. Instructions: At what amount should the desks appear in the company’s December 31, 2010, inventory, assuming that the company has adopted a lower-of-cost-or-market approach for valuation of inventories on an individual-item basis? Finished Desks A B C D I nventory cost 470 $ 450 $ 830 $ 960 $ Est. cost to manufacture 460 430 610 1,000 Commissions and disposal costs 50 60 80 130 Catalog selling price 500 540 900 1,200 Lower-of-Cost-or-Market
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Not Not < Cost = Market = Ceiling = Replacement Cost Floor = LCM = Lower-of-Cost-or-Market Not Not > Finished Desks A I nventory cost 470 $ Est. cost to manuf acture 460 Commissions and disposal costs 50 Catalog selling price 500
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This note was uploaded on 12/29/2009 for the course ACC 5100 taught by Professor Andrews during the Fall '09 term at Wayne State University.

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510chapter9fall2009afterclass1282009 - Chapter 9...

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