Forest Company has five products in its inventory. Information about ending inventory follows. ...
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Accounting
Forest Company has five products in its inventory. Information about ending inventory follows.
Product
Quantity
Unit Cost
Unit Replacement Cost
Unit Selling Price
A
900
$ 23
$ 25
$ 29
B
500
28
24
31
C
700
16
15
21
D
1,000
20
17
19
E
700
27
25
26
The cost to sell for each product consists of a 15 percent sales commission. The normal profit for each product is 35 percent of the selling price.
Required:
Determine the carrying value of ending inventory, assuming the lower of cost or market (LCM) rule is applied to individual products.
Determine the carrying value of inventory, assuming the LCM rule is applied to the entire inventory.
Assuming inventory write-downs are common for Forest, record any necessary year-end adjusting entry based on the amount calculated in requirement 2.
Complete this question by entering your answers in the tabs below. Determine the carrying value of inventory, assuming the LCM rule is applied to the entire inventory. Note: Do not round intermediate calculations. Complete this question by entering your answers in the tabs below. Determine the carrying value of ending inventory, assuming the lower of cost or market (LCM) rule is applied to individual products. Note: Do not round intermediate calculations. Journal entry worksheet Record any necessary year-end adjusting entry assuming that inventory writedowns are common for Forest Company. Note: Enter debits before credits
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