PartA
Adria Lopez of Success Systems is evaluating her inventory todetermine whether it must be adjusted based on lower of cost ormarket rules. Her company has three different types of software inits inventory and the following information is available foreach.
Per Unit Inventory Items Units Cost Market Officeproductivity 3 $ 76 $ 74 Desktoppublishing 2 103 100 Accounting 3 90 96
Required: 1(a). Compute the lower of cost or market for ending inventoryassuming Lopez applies the lower of cost or market rule toinventory as a whole.
1(b). Must Lopez adjust the reported inventory value?
No Yes
2(a). Compute the lower of cost or market rule to each product ininventory.
2(b). Must Lopez adjust the reported inventory value?
No Yes
PartB
Selected accounts and balances for the three months ended March31, 2014, for Success Systems follow.
January 1 beginninginventory $ 0 Cost of goodssold 14,052 March 31 endinginventory 704
Required: 1. Compute inventory turnover and daysâ sales in inventory for thethree months ended March 31, 2014. (Use 365 days a year. Donot round intermediate calculations. Round your days' sales answerto 1 decimal place and turnover answer to the nearest wholenumber.)
| PartA |
Adria Lopez of Success Systems is evaluating her inventory todetermine whether it must be adjusted based on lower of cost ormarket rules. Her company has three different types of software inits inventory and the following information is available foreach. |
| Per Unit | |||||
| Inventory Items | Units | Cost | Market | ||
| Officeproductivity | 3 | $ | 76 | $ | 74 |
| Desktoppublishing | 2 | 103 | 100 | ||
| Accounting | 3 | 90 | 96 | ||
| Required: | |
| 1(a). | Compute the lower of cost or market for ending inventoryassuming Lopez applies the lower of cost or market rule toinventory as a whole. |
| 1(b). | Must Lopez adjust the reported inventory value? | ||||
|
| 2(a). | Compute the lower of cost or market rule to each product ininventory. |
| 2(b). | Must Lopez adjust the reported inventory value? | ||||
|
| PartB |
Selected accounts and balances for the three months ended March31, 2014, for Success Systems follow. |
| January 1 beginninginventory | $ | 0 |
| Cost of goodssold | 14,052 | |
| March 31 endinginventory | 704 | |
| Required: | |
| 1. | Compute inventory turnover and daysâ sales in inventory for thethree months ended March 31, 2014. (Use 365 days a year. Donot round intermediate calculations. Round your days' sales answerto 1 decimal place and turnover answer to the nearest wholenumber.) |
