A retail furniture dealer counted the following goods in inventory on December 3

Question

A retail furniture dealer counted the following goods in inventory on December 31. An accountant recommended that the inventory items be valued at the lower of cost or market price. Compute the total value of the inventory based on the lower of cost or market price. If required, round your answers to two decimal places.

Article Quantity Unit Cost Price Extension at Cost Unit Market Price Extension at Market Inventory Value at Lower of Cost or Market Armchairs, wood 30 $47.90 $______ $39.90 $_______ $_________ Armchairs, tapestry 14 105.60 $______ 102.10 $_______ $_______ Armchairs, Windsor 20 86.40 $______ 95.90 $_______ $_______ Beds, bunk 6 88.10 $______ 93.10 $_______ $_______ Bedroom suites 3 334.10 $______ 330.60 $_______ $_______ Tables, coffee 29 64.70 $______ 69.20 $_______ $_______ Chairs, kitchen 27 23.40 $______ 31.40 $_______ $_______ Dining tables 17 117.70 $______ 122.70 $_______ $_______ Dining suites 12 280.20 $______ 282.20 $_______ $_______ Sofa sets 17 368.50 $______ 370.50 $_______ $_______ Total $______ $_______ $_______

Explanation / Answer

Article (Column A) Quantity (Column B) Unit Cost Price (Column C) Extension at Cost (Column D)=(Unit Cost in Column C x Quantity in Column B) Unit Market Price (Column E) Extension at Market (Column F)=(Unit Market Price in Column E x Quantity in Column B) Inventory Value at Lower of Cost or Market (Column G) Explanation Armchairs, wood 30 $47.90 $1,437.00 $39.90 $     1,197.00 $ 1,197.00 Out of market value of goods in column F & cost of goods in column D market value is lower than cost, so value of goods is taken at market value=$ 1,197 Armchairs, tapestry 14 105.6 $1,478.40 102.1 $     1,429.40 $ 1,429.40 Out of market value of goods in column F & cost of goods in column D market value is lower than cost, so value of goods is taken at market value=$ 1,429.40 Armchairs, Windsor 20 86.4 $1,728.00 95.9 $     1,918.00 $1,728.00 Out of market value of goods in column F & cost of goods in column D cost is lower than market value, so value of goods is taken at cost=$ 1,728 Beds, bunk 6 88.1 $528.60 93.1 $        558.60 $528.60 Out of market value of goods in column F & cost of goods in column D cost is lower than market value, so value of goods is taken at cost=$ 528.60 Bedroom suites 3 334.1 $1,002.30 330.6 $        991.80 $     991.80 Out of market value of goods in column F & cost of goods in column D market value is lower than cost, so value of goods is taken at market value= $ 991.80 Tables, coffee 29 64.7 $1,876.30 69.2 $     2,006.80 $1,876.30 Out of market value of goods in column F & cost of goods in column D cost is lower than market value, so value of goods is taken at cost = $ 1,876.30 Chairs, kitchen 27 23.4 $631.80 31.4 $        847.80 $631.80 Out of market value of goods in column F & cost of goods in column D cost is lower than market value, so value of goods is taken at cost = $ 631.80 Dining tables 17 117.7 $2,000.90 122.7 $     2,085.90 $2,000.90 Out of market value of goods in column F & cost of goods in column D cost is lower than market value, so value of goods is taken at cost = $ 2,000.90 Dining suites 12 280.2 $3,362.40 282.2 $     3,386.40 $3,362.40 Out of market value of goods in column F & cost of goods in column D cost is lower than market value, so value of goods is taken at cost = $ 3,362.40 Sofa sets 17 368.5 $6,264.50 370.5 $     6,298.50 $6,264.50 Out of market value of goods in column F & cost of goods in column D cost is lower than market value, so value of goods is taken at cost = $ 6,264.50 Total $20,310.20 $20,720.20 $20,010.70

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