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assignments&takeAssignmentSessionLocator; assignment-take&inprogress-false; Q Show Me How Yang Manufacturing sells a limited line of spedially made products, using television advertising campaigns in large cities. At year end, Yang has the following data for its inventory: Item Number of Units Historical Cost per Market Value per Unit Unit Phone Stereo Electric shaver MP3 alarm clock Handheld game system Required 600 180 220 430 570 $24 $13 190 30 26 25 19 Check My Work account is adusted 1 Compare actual cost of inventory to its market value The lower amount is the vaue ot inventory it market value is lower the inventory 2. Prepare the journal entry required to value the inventory at lower of cost or market. Cost of Goods Sold Reduced inventory to market value) 452 PM

Explanation / Answer

1 Carrying Value of the ending Inventory (lower of Historical cost or market value) = $ 67,840 2 Cost of Goods Sold $ 67,840 Inventory $ 67,840 Workings: No. Of units X Cost per unit = Amount Phone 600 X $                   13 = $    7,800 Stereo 180 X $                 177 = $ 31,860 Electric Shaver 220 X $                   30 = $    6,600 MP3 alarm clock 430 X $                   25 = $ 10,750 Handheld game system 570 X $                   19 = $ 10,830 Carrying Value of the ending Inventory = $ 67,840 Cost per unit lower of Historical cost or market value

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