Inventory Valuation. In January the materials ledger card fo…
Inventory Valuation. In January the materials ledger card for metal cast- ings of a certain kind and weight showed the following data:
Received Issued
Cost Per Requisition
Units
Unit
Number
Units
Jan. 1. Balance
100
$1.00
Jan.
4.
107
80
10. Purchase
100
.95
11.
216
70
20. Purchase
200
.90
23.
461
60
28. Purchase
100
.88
29.
515
120
Required: (1) The ending inventory cost, assuming that a perpetual inven- tory system is used with the lifo costing method.
(2) The ending inventory cost, assuming that a periodic inventory system is used and that the physical inventory is priced by the lifo costing method.
(3) Using an assumed fifo cost value for this ending inventory of $165 and a replacement cost of $160, determine the value to be used in the balance sheet if: the lower of cost or market is to be used, the estimated selling price is $1.25 per unit, the estimated costs of disposal are $.25 per unit, and the normal profit is
$.05 per unit.
(4) The journal entry necessary to reflect the decline in inventory value computed in (3) above if this cost is considered to be a normal cost of the manufacturing operation.
