Question - The following information pertains to Hagen Metal Work's ending inventory for the current year:
|
Item
|
Quantity
|
Unit Cost
|
Unit Market Value
|
|
C
|
90
|
$24
|
$16
|
|
D
|
75
|
22
|
20
|
|
K
|
40
|
25
|
28
|
|
M
|
22
|
15
|
17
|
Required -
a. Determine the value of the ending inventory using the lower-of-cost-or-market rule applied to (1) each individual inventory item and (2) the inventory in aggregate.
b. Calculate the adjustment required under both methods, assuming the decline in value is immaterial.