Applying lower-of-costor-market

Reference no: EM131133204

Applying Lower-of-Costor-Market

Azalea Garden Center provides the following information about its inventory:

Group	Item	Units	Unit Cost	Unit Market
1	A	5	$15	$13
1	B	14	$10	$11
2	C	8	$ 5	$ 7
2	D	15	$12	$11

Required

a. If Azalea uses the lower-of-cost-or-market rule, what should it report as the balance of inventory if (1) one market value is computed for all inventories, (2) market value is computed by group, and (3) market value is computed for each inventory type?

b. Prepare any journal entries necessary based on your answers in part (a).

Reference no: EM131133204

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