Jones Company is preparing the annual financial statements dated December 31 of

Question

Jones Company is preparing the annual financial statements dated December 31 of the current year. Ending inventory information about the five major items stocked for regular sale follows ENDING INVENTORY, CURRENT YEAR Net Realizable Value (Market) at Year-End 20 Quantity on Hand Unit Cost When Acquired (FIFO) $ 23 Item 8 38 48 18 78 358 18 13 Required Compute the valuation that should be used for the current year ending inventory using the LCM rule applied on an item-by-item basis Total Market Valuation LCM Item Quantity Total Cost 58 18 78 E 358 Total

Explanation / Answer

Quantity total total LCM item cost market Valuation A 58 1334 1160 1,160 B 88 3344 4224 3,344 C 18 1008 1080 1,008 D 78 2574 2964 2,574 E 358 6444 4654 4,654 total 14704 14082 12,740

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