AP9-1 - has usually been successful in doing so. At what...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
AP9-1 Correct.     (Lower-of-Cost-or-Market) Grant Wood Company manufactures desks. Most of the company's desks are standard models and are sold on the basis of  catalog prices. At December 31, 2011, the following finished desks appear in the company's inventory. Finished  Desks A B C D 2010 catalog selling price $509   $543   $1,019   $1,189   FIFO cost per inventory list 12/31/10 532   509   940   1,087   Estimated current cost to manufacture        (at December 31, 2010, and early 2011) 521   487   691   1,132   Sales commissions and estimated other costs of disposal 57   68   91   147   2011 catalog selling price 566   611   1,019   1,358   The 2010 catalog was in effect through November 2010 and the 2011 catalog is effective as of December 1, 2010. All catalog  prices are net of the usual discounts. Generally, the company attempts to obtain a 20% gross margin on selling price and 
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: has usually been successful in doing so. At what amount should each of the four desks appear in the company's December 31, 2010, inventory, assuming that the company has adopted a lower-of-FIFO-cost-or-market approach for valuation of inventories on an individual-item basis AP9-1 Item Cost Replace ment Cost Ceiling* Floor** Designat ed Market Lower of Cost or Market A $532 $521 $509 $396 $509 $509 B 509 487 543 421 487 487 C 940 691 928 724 724 724 D 1,087 1,132 1,211 939 1,132 1,087 *Ceiling = 2011 catalog selling price less sales commissions and estimated other cost of disposal. (2011 catalog prices are in effect as of 12/01/10.) **Floor = Ceiling less (20% 2011 catalog selling price)....
View Full Document

This note was uploaded on 11/30/2011 for the course ACC 101 taught by Professor B during the Spring '09 term at CUNY Baruch.

Ask a homework question - tutors are online