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 Item Units Cost Market Car audio equipment Speakers 336 $ 91 $ 99 Stereos 251 112 101 Amplifiers 317 87 96 Subwoofers 195 53 42 Security equipment Alarms 471 151 126 Locks 282 94 85 Cameras 203 311 323 Binocular equipment Tripods 176 71 85 Stabilizers 161 98 106 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 adjustment to the Merchandise Inventory account.

Explanation / Answer

Per Unit Total LCM applied to: Item Units Cost Market Cost Market Entire Inventory Individual Items Audio equipment Speakers 336 91 99 30,576 33,264 30,576 Stereos 251 112 101 28,112 25,351 25,351 Amplifiers 317 87 96 27,579 30,432 27,579 Subwoofers 195 53 42 10,335 8,190 8,190 Security equipment Alarms 471 151 126 71,121 59,346 59,346 Locks 282 94 85 26,508 23,970 23,970 Cameras 203 311 323 63,133 65,569 63,133 Binocular equipment Tripods 176 71 85 12,496 14,960 12,496 Stabilizers 161 98 106 15,778 17,066 15,778 Total 285638 278148 278148 266419 2 Date General Journal Debit Credit Dec-31 Cost of goods sold 19,219 Merchandise inventory 19,219

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.