Question

The Jewel Fool had the following inventory items on hand at the end of the year. Quantity Cost per Item Market Value per Item Necklaces 15 $ 66 $ 71 Bracelets 60 56 36 Determine the lower of cost or market per unit and the total amount that should be reported on the balance sheet for each item of inventory.

Answer 1

Answer:

                          Lower of Cost or Market per Unit    Total Amount Reported

Necklaces                           66                                                 660

Bracelets                              36                                                1800

Total                                                                                         2460

Answer 2

Based on the inventory items on hand, the lower of cost or market per unit and the total amount reported will be:

• Necklaces Lower of cost or market per unit = $66
• Necklaces Total amount reported = $990.
• Bracelets Lower of cost or market per unit = $36.
• Bracelets Total amount reported = $2,160.

What is the Necklaces Lower of cost or market per unit?

This is the lower amount between the cost of the necklaces and their market value.

The lower value is the Cost per item of $66.

What is the Necklaces Total amount reported?

This is:

= Lower of cost or market value x Quantity

= 66 x 15

= $990

What is Bracelets Lower of cost or market per unit?

Lower value is Market value of $36.

What is Bracelets Total amount reported?

= 36 x 60

= $2,160

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