Lower of Cost or Market Palmquist Company has five different inventory items tha
ID: 2421025 • Letter: L
Question
Lower of Cost or Market
Palmquist Company has five different inventory items that it values by the lower of cost or market rule. The normal markup on all items is 20% of cost. The following information is obtained from the company's records:
Required:
Compute the lower of cost or market value for each item. Round your answers to the nearest cent.
Compute the total inventory value if the lower of cost or market is applied to each individual item.
$ ?
Compute the total inventory value if the lower of cost or market is applied to the inventory as a whole.
$ ?
Compute the lower of cost or market value for each item if the Palmquist Company uses IFRS. Round your answers to the nearest cent.
Item Lower of
Cost or Market 1 $ ? 2 ? 3 ? 4 ? 5 ?
Explanation / Answer
Item Lower of Cost or Market 1 10 2 7.8 3 13.5 4 12 5 25 Total Inventory 68.3 if applied individually If applied as a whole Total Cost = 10+8+15+18+25 76 Replacement 9.10+8.10+13.50+12+25.50 68.2 NRV = 9.20+7.80+14+17+25.30 73.3 Total inventory will be $ 68.2
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