Compute amount that should be reported for ending inventory

Reference no: EM131973999

Problem

Sandals Company is preparing the annual financial statements dated December 31. Ending inventory information about the four major items stocked for regular sale follows:

Product Line	Quantity on Hand		Unit Cost When Acquire(FIFO)		Market Value at Year-End
Air Flow		35	$	15	$	17
Blister Buster		75		38		36
Coolonite		34		65		60
Dudesly		35		30		35

Required:

1. Compute the amount that should be reported for the ending inventory using the LCM rule applied to each item.

2. How will the write-down of inventory to lower of cost or market affect the company's expenses reported for the year ended December 31?

Reference no: EM131973999

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