The Rocco Company has six different categories of inventory. Quantity, cost, market value for each inventory category is shown below Required:
a) Determine the value of ending inventory after applying the lower-of-cost-or-market rule to each individual category of inventory.
b) Determine the value of ending inventory after applying the lower-of-cost-or-market rule to inventory in aggregate.
c) Prepare the journal entry, if required, to adjust inventory for part a above.
d) Prepare the journal entry, if required, to adjust inventory for part b above.

Question

The Rocco Company has six different categories of inventory. Quantity, cost, market value for each inventory category is shown below  Required:
a) Determine the value of ending inventory after applying the lower-of-cost-or-market rule to each individual category of inventory.
b) Determine the value of ending inventory after applying the lower-of-cost-or-market rule to inventory in aggregate.
c) Prepare the journal entry, if required, to adjust inventory for part a above.
d) Prepare the journal entry, if required, to adjust inventory for part b above.

Quizplus · Accepted Answer

The Answer of The Rocco Company has six different categories of inventory. Quantity, cost, market value for each inventory category is shown below  Required:
a) Determine the value of ending inventory after applying the lower-of-cost-or-market rule to each individual category of inventory.
b) Determine the value of ending inventory after applying the lower-of-cost-or-market rule to inventory in aggregate.
c) Prepare the journal entry, if required, to adjust inventory for part a above.
d) Prepare the journal entry, if required, to adjust inventory for part b above.

The Rocco Company Has Six Different Categories of Inventory