Almaden Hardware Store sells two distinct types of products, tools and paint pro

Question

Almaden Hardware Store sells two distinct types of products, tools and paint products. Information pertaining to its 2013 year-end inventory is as follows: Inventory, by Product Type Quantity Per Unit Cost Designated Market Tools: Hammers 120 $ 4.30 $ 4.80 Saws 130 9.30 8.30 Screwdrivers 230 1.30 1.90 Paint products: 1-gallon cans 430 5.30 4.30 Paint brushes 120 3.30 3.80 Required: 1. Determine the balance sheet inventory carrying value at year-end, assuming the LCM rule is applied to (a) individual products, (b) product type, and (c) total inventory.

2. Assuming that the company recognizes an inventory write-down as a separate income statement item, for each of the LCM applications determine the amount of the loss.

Explanation / Answer

Almaden Hardware Store sells two distinct types of products, tools and paint pro

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