Question

The inventory of 3T Company on December 31, 2014, consists of the following items.

Part No.

Quantity

Cost per Unit

Cost to Replace per Unit

a Part No. 121 is obsolete and has a realizable value of $0.55 each as scrap.

(a) Determine the inventory as of December 31, 2014, by the lower-of-cost-or-market method, applying this method directly to each item.

(b) Determine the inventory by the lower-of-cost-or-market method, applying the method to the total of the inventory.

Part No.

 

Quantity

 

Cost per Unit

 

Cost to Replace per Unit

110

 

 

630

 

 

$99

 

 

$110

 

111

 

 

1,110

 

 

66

 

 

57

 

112

 

 

510

 

 

88

 

 

84

 

113

 

 

260

 

 

187

 

 

198

 

120

 

 

470

 

 

226

 

 

229

 

121

a

 

1,700

 

 

18

 

 

15

 

122

 

 

360

 

 

264

 

 

259