A physical inventory of Liverpool Company taken at December 31 reveals the follo

Question

A physical inventory of Liverpool Company taken at December 31 reveals the following Per Unit Units Cost Market Item Car audio equipment Speakers Stereos Amplifiers Subwoofers 337 92 $100 252 113 102 318 196 54 97 43 Security equipment Alarms Locks Cameras 472 152 127 283 95 204 312 324 86 Binocular equipment 86 Tripods Stabilizers 177 72 162 99 107 Required: 1. Calculate the lower of cost or market for the inventory applied separately to each item. 2. If the market amount is less than the recorded cost of the inventory, then record the LCM adjustm account. Complete this questions by entering your answers in the tabs below. Required 1 Required 2

Explanation / Answer

1)   

  

2.

NOte:-  Adjusting entry for $19275 (Total inventory cost of $289107 - LCM by items of $269832)

Items Units Per unit Total LCM applied to Cost Market Cost Market Entire inventiry Individual items Car audio equipment speakers 337 92 100 31004 33700 31004 stereos 252 113 102 28476 25704 25704 Amplifiers 318 88 97 27984 30846 27984 subwoofers 196 54 43 10584 8428 8428 Security equipment Alarms 472 152 127 71744 59944 59944 Locks 283 95 86 26885 24338 24338 Cameras 204 312 324 63648 66096 63648 Binocular equipment Tripods 177 72 86 12744 15222 12744 Stabilizers 162 99 107 16038 17334 16038 Total 289107 281612 281612 $269832

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