Price company employs the lower-of-cost-or-market method

Reference no: EM13391785

Price Company uses the lower-of-cost-or-market method, on an individual-item basis, in pricing its inventory items. The inventory at December 31, 2014, included product Z. Relevant per-unit data for product Z appear below.

Estimated selling price $56

Cost 48

Replacement cost 40

Estimated selling expense 18

Normal profit 4

There were 5,000 units of product Z on hand at December 31, 2014. Product Z was incorrectly valued at $48 per unit for reporting purposes. All 5,000 units were sold in 2015.

Instructions

Compute the effect of this error on net income for 2014 and the effect on net income for 2015, and indicate the direction of the misstatement for each year.

Reference no: EM13391785

Questions Cloud

Estimate degree to which alternative provider payment : capitation payers and provider behavior please respond to the followingsuggest at least one 1 method by which

Do some research regarding ethics and codes of conduct then : do some research regarding ethics and codes of conduct. then write an original students code of conduct that you think

The marketing plan is well organized using headings : the marketing plan assignment gives you the opportunity to practice developing an integrated business and marketing

Val is concerned that the commissioned salespeople in her : 1. which of the following does not indicate conditions that lead to intense rivalry that adversely affect a retailer

Price company employs the lower-of-cost-or-market method : price company uses the lower-of-cost-or-market method on an individual-item basis in pricing its inventory items. the

During 2014 galarraga furniture company purchases a carload : during 2014 galarraga furniture company purchases a carload of wicker chairs. the manufacturer sells the chairs to

A production plant with fixed costs of 300000 generates a : a production plant with fixed costs of 300000 produces a product with variable costs of 40 per unit and sells them at

Primary task response within the discussion board area : primary task response within the discussion board area write 400ndash600 words that respond to the following questions

Canseco company has been having difficulty obtaining key : canseco company has been having difficulty obtaining key raw materials for its manufacturing process. the company

User Account

All Pages