E9-2 - 2011 for each of the inventory items above. Item Net...

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Riegel Company uses the lower-of-cost-or-market method, on an Individual-item basis, in pricing its inventory items. The inventory at December 31, 2011, 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 I Estimated selling proce $120 $110 $95 $90 $110 $90 Cost 75 80 80 80 50 36 Replacement cost 120 72 70 30 70 30 Estimated selling expense 30 30 35 35 30 30 Normal profit 20 20 20 20 20 20 Using the lower-of-cost-or-market rule, determine the proper unit value for balance sheet reporting purposes at December 31,
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Unformatted text preview: 2011 for each of the inventory items above. Item Net Realizable Value (Ceiling) Net Realizable Value Less Normal Profit (Floor) Replacement Cost Designated Market Cost LCM D $90* $70** $120 $90 $75 $75 E 80 60 72 72 80 72 F 60 40 70 60 80 60 G 55 35 30 35 80 35 H 80 60 70 70 50 50 I 60 40 30 40 36 36 *Estimated selling price Estimated selling expense = $120 $30 = $90. **Net realizable value Normal profit margin = $90 $20 = $70....
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