Ch 9 Solutions

Ch 9 Solutions - SOLUTIONS TO EXERCISES EXERCISE 9-1 (1520...

Info iconThis preview shows pages 1–6. Sign up to view the full content.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: SOLUTIONS TO EXERCISES EXERCISE 9-1 (1520 minutes) Per Unit Lower-of- Part No. Quantity Cost Market Total Cost Total Market Cost-or- Market 110 600 $ 95 $100.00 $ 57,000 $ 60,000 $ 57,000 111 1,000 60 52.00 60,000 52,000 52,000 112 500 80 76.00 40,000 38,000 38,000 113 200 170 180.00 34,000 36,000 34,000 120 400 205 208.00 82,000 83,200 82,000 121 1,600 16 0.50 25,600 800 800 122 300 240 235.00 72,000 70,500 Totals 70,500 $370,600 $340,500 $334,300 (a) $334,300. (b) $340,500. EXERCISE 9-2 (1015 minutes) 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. EXERCISE 9-3 (1520 minutes) Item No. Cost per Unit Replacement Cost Net Realizable Value Net Real. Value Less Normal Profit Designated Market Value LCM Quantity Final Inventory Value 1320 $3.20 $3.00 $4.15* $2.90** $3.00 $3.00 1,200 $ 3,600 1333 2.70 2.30 2.90 2.40 2.40 2.40 900 2,160 1426 4.50 3.70 4.60 3.60 3.70 3.70 800 2,960 1437 3.60 3.10 2.75 1.85 2.75 2.75 1,000 2,750 1510 2.25 2.00 2.45 1.85 2.00 2.00 700 1,400 1522 3.00 2.70 3.50 3.00 3.00 3.00 500 1,500 1573 1.80 1.60 1.75 1.25 1.60 1.60 3,000 4,800 1626 4.70 5.20 5.50 4.50 5.20 4.70 1,000 4,700 *** $23,870 *$4.50 $.35 = $4.15. **$4.15 $1.25 = $2.90. ***Cost is used because it is lower than designated market value. EXERCISE 9-4 (1015 minutes) (a) 12/31/10 Cost of Goods Sold .............................. 24,000 Inventory ...................................... 24,000 12/31/11 Cost of Goods Sold .............................. 20,000 Inventory ...................................... 20,000 (b) 12/31/10 Loss Due to Market Decline of Inventory ............................................ 24,000 Allowance to Reduce Inventory to Market ................................... 24,000 12/31/11 Allowance to Reduce Inventory to Market ............................................ 4,000* Recovery of Loss Due to Market Decline of Inventory ..... 4,000 EXERCISE 9-4 (Continued) *Cost of inventory at 12/31/10 .................................... $346,000 Lower-of-cost-or-market at 12/31/10 ....................... (322,000 ) Allowance amount needed to reduce inventory to market (a) ........................................................... $ 24,000 Cost of inventory at 12/31/11 ................................... $410,000 Lower-of-cost-or-market at 12/31/11 ....................... (390,000 ) Allowance amount needed to reduce inventory to market (b) ........................................................... $ 20,000 Recovery of previously recognized loss = (a) (b) = $24,000 $20,000 = $4,000....
View Full Document

Page1 / 37

Ch 9 Solutions - SOLUTIONS TO EXERCISES EXERCISE 9-1 (1520...

This preview shows document pages 1 - 6. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online