ment Exerc eBook Video Calculator Instructions Inventory Valuation Journal Entri
ID: 2543272 • Letter: M
Question
ment Exerc eBook Video Calculator Instructions Inventory Valuation Journal Entries Instructions ower-of-Cost-or-Market For the weighted-average method, round calculations to two decimal places. If required, round your final answers to the nearest cent. 1. Calculate the total amount to be assigned to the ending inventory under each of the following periodic inventory methods. Assume that the market price per unit (cost to replace) of Stalberg's inventory on December 31, 20--, was $26. Calculate the total amount to be assigned to the ending inventory on December 31 under each of the following methods. 3. What journal entry would be made under lower-of-cost-or-market for parts 2(a) FIFO and 2(b) Weighted-average? If no entry is required type "No entry required" in the account name box and leave the amount boxes blank or enter "0". Stalberg Company's beginning inventory and purchases during the fiscal year ended December 31, 20-, were as follows: Units Unit Price Total Cost Jan. 1 Beginning inventory $18 $180 Mar. 5 1st purchase 10 220Explanation / Answer
1a. FIFO: $300
The ending inventory will comprise of the Dec. 8 purchase of 10 units. Hence ending inventory = 10 units x $30 = $300
1b. Weighted-average: $237.50
Weighted-average rate = $950/40 units = $23.75
Ending inventory = 10 units x $23.75 = $237.50
2a. FIFO lower-of-cost-or-market: $260
Cost = $300
Market value = 10 units x $26 = $260
2b. Weighted-average lower-of-cost-or-market: $237.50
Cost = $237.50
Market value = 10 units x $26 = $260
3.
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