9-28 Enter the appropriate amounts in the shaded cells in columns F, H, J, L, and N.

1) Computation of inventory cost Commodity A Commodity B Commodity C Commodity D

Name: SOLUTION

3,000 1,650 5,000 3,250

units @ units @ units @ units @

5.50 6.00 2.50 7.00

$ 16,500 9,900 12,500 22,750 Market Limited by Floor and Ceiling $ 5.25 7.20 2.75 6.30

Computation of inventory at market Replacement Cost $ 5.25 6.00 2.00 7.50

Commodity A Commodity B Commodity C Commodity D

Floor 5.10 7.20 2.75 4.55

Ceiling $ 7.10 8.45 3.25 6.30

Units 3,000 1,650 5,000 3,250

Market $ 15,750 11,880 13,750 20,475

Categories and Items Category 1: Commodity A Commodity B Total Category 1 Category 2: Commodity C Commodity D Total Category 2 Total inventory

Cost $ 16,500 9,900 $ 26,400

Market $ 15,750 11,880 $ 27,630

Individual Items $ 15,750 9,900 $ 25,650

Lower of Cost or Market Inventory Total Categories Inventory

$ 26,400

$ 12,500 22,750 $ 35,250 a. $ 61,650

$ 13,750 20,475 $ 34,225 $ 61,855

$ 12,500 20,475 $ 32,975

34,225

$ 58,625 b. 2) a. b. No entry required; inventory is already stated at cost Loss from Decline in Value of Inventory Inventory Loss from Decline in Value of Inventory Allowance for Decline in Value of Inventory No entry required: For the total inventory, market exceeds cost. 3,025

$ 60,625 c.

$ 61,650 d.

3,025 1,025 1,025

c.

d.