Problem 6-4A Report inventory using lower-of-cost-or-market (LO6) [The following

Question

Problem 6-4A Report inventory using lower-of-cost-or-market (LO6) [The following information applies to the questions displayed below.j A local Chevrolet dealership carries the following types of vehicles Market (replacement cost) per Unit Cost per Unit Inventory ltems Vans Trucks 2-door sedans 4-door sedans Sports cars SUVs Quantity 2 5 $15,000 15,000 13,000 18,000 30,000 18,000 $17,000 16,000 11,000 15,000 27,000 26,000 6 2 Because of recent increases in gasoline prices, the car dealership has noticed a reduced demand for its SUVs, vans, and trucks References Section Break Problem 6-4A Report inventory using lower-of-cost-or-market (LO6) value 10.00 points You did not receive credit for this question in a previous att Problem 6-4A Part 1 Required: 1. Compute the total cost of the entire inventory. Total cost

Explanation / Answer

Answer 1. Calculation of Total Cost of Entire Inventory Inventory Items Quantity Cost per Unit Total Cost Vans 2                       17,000            34,000 Trucks 5                       16,000            80,000 2-doors sedans 1                       11,000            11,000 4-doors sedans 6                       15,000            90,000 Sports Cars 2                       27,000            54,000 SUV's 7                       26,000          182,000 Total Costs          451,000 Answer 2. Inventory Items Quantity Lower of Cost or Market Value per Unit Total Cost Vans 2                       15,000            30,000 Trucks 5                       15,000            75,000 2-doors sedans 1                       11,000            11,000 4-doors sedans 6                       15,000            90,000 Sports Cars 2                       27,000            54,000 SUV's 7                       18,000          126,000 Total Costs          386,000 Answer 3. Journal Entry Transaction Dr. Amt. Cr. Amt 1 Cost of Goods Sold                            Dr.                       65,000    To Inventory            65,000 Answer 4. True A write-down in a company's inventory is recorded by reducing the amount reported as inventory. In other words, the asset account Inventory is reduced by a credit. The debit in the entry to write down inventory is reported in an account such as Loss on Write-Down of Inventory, an income statement account.

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.