ACCT 3001 Chapter : Chapter 09 Notes
Document Summary
Read the textbook actively before each class and after each lecture for reinforced understanding. Make a list of questions to ask in class. After class: rework in-class problems from these notes, work the wiley plus recommended assignments, and, any extra exercises posted on moodle. We"re in the final stretch: lower of cost or market, valuation bases, gross profit method, presentation and analysis, lower of cost or market (lcm) Rationale for limits: ceiling prevents overstatement of the value of obsolete, damaged, or shopworn inventories, floor deters understatement of inventory and overstatement of the loss in the current period. The following data is available about the items in inventory as of december 31, 2004. Determine the proper inventory value using the lower-of-cost-or- market method on (a) an item-by-item basis and (b) a total inventory basis. Evaluation of lcm rule deficiencies: expense recorded when loss in utility occurs.
