HW #6 Solution

HW #6 Solution - Lab Homework#6 Name 1 Given the historical...

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Lab Homework #6 Name______________________________ 1. Given the historical cost of product Z is $80, the selling price of product Z is $95, costs to sell product Z are $11, the replacement cost for product Z is $83, and the normal profit margin is 40% of sales price, what is the market value that should be used in the lower-of-cost-or-market comparison? a. $80. Ceiling = Net Realizable Value = $84 b. $84. Replacement Cost = $83 c. $83. Floor = NRV – Normal Profit = $46 d. $46. 2. The following information is available for October for Barton Company. Beginning inventory $150,000 Net purchases 450,000 Net sales 900,000 Percentage markup on cost 66.67% A fire destroyed Barton’s October 31 inventory, leaving undamaged inventory with a cost of $9,000. Using the gross profit method, the estimated ending inventory destroyed by fire is a. $51,000. b. $231,000. c. $240,000. d. $300,000. Beginning Inventory: 150,000 Purchases 450,000 COGAS 600,000 Sales at Cost (540,000) 900,000x.60=540,000 (based on 40% markup) Ending Inventory 60,000 Less: Undamaged 9,000 Destroyed by Fire 51,000
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Plank Co. uses the retail inventory method. The following information is available for the
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HW #6 Solution - Lab Homework#6 Name 1 Given the historical...

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