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Green Leaf Company had the following information available on December 31:

-Management applies the LCM rule on the basis of inventory category and includes wheelbarrows and hoses in the large implement category and shovels and gloves in the small implement category.What is the write-down required?
A)$864.
B)$556.
C)$576.
D)$710.

Question

[The following information applies to the questions displayed below.]
Green Leaf Company had the following information available on December 31:
 
-Management applies the LCM rule on the basis of inventory category and includes wheelbarrows and hoses in the large implement category and shovels and gloves in the small implement category.What is the write-down required?
A)$864. 
B)$556. 
C)$576. 
D)$710.

Quizplus · Accepted Answer

The write-down is calculated by comparing the cost and market value of each category. For the large implement category (wheelbarrows and hoses), the market value is lower than the cost, requiring a write-down. For the small implement category (shovels and gloves), the market value is higher, so no write-down is needed. The total write-down required is $576.

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