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Chapter 09 - In-Class Exercises

Chapter 09 - In-Class Exercises - Chapter 9 In-Class...

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Chapter # 9 In-Class Exercises Page 1 of 5 Chapter 09 - In-Class Exercises - 05/23/05) Exercise #1 Below is information for six different products: Item D Item E Item F Item G Item H Item I Estimated selling price 60,000 $ 77,000 $ 19,000 $ 72,000 $ 33,000 $ 13,500 $ Historical cost 37,500 $ 56,000 $ 16,000 $ 64,000 $ 15,000 $ 5,400 $ Replacement cost 60,000 $ 50,400 $ 14,000 $ 24,000 $ 21,000 $ 4,500 $ Estimated selling expense 15,000 $ 21,000 $ 6,000 $ 20,000 $ 9,000 $ 4,500 $ Normal profit 10,000 $ 14,000 $ 4,000 $ 16,000 $ 6,000 $ 3,000 $ Required: Using the lower of cost or market rule, determine the proper total value for balance sheet reporting purposes at December 31, 2005, for each of the inventory items. Using LCM to value the entire inventory as a single pool, determine the proper total value for balance sheet reporting purposes at December 31, 2005, for total inventory. Exercise #2 At cost At Market Beginning Inventory $200,000 $200,000 Purchases 125,000 125,000 Ending Inventory 165,000 120,000 Provide the journal entries for writing down inventory to market in the following situations: (a) Assume Periodic Inventory Method and the Direct Method
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