Valuing Inventory at Lower-of-Cost-or-Market Management of Tarry Company takes the position that under the lower-of-cost-or-market rule, the two items below are reported in ending inventory at $119,520 (total). Inventory cost is reported using LIFO. • Edgers: 2,160 in inventory; cost is $22 each; replacement cost is $16 each; estimated sale price is $30 each; estimated distribution cost is $3 each; and normal profit is 10% of sale price.
• Hedge clippers: 1,440 in inventory; cost is $50 each; replacement cost is $36 each; estimated sale price is $90 each; estimated distribution cost is $28 each; and normal profit is 20% of sale price.
a. Compute your inventory valuation by item and in total for the Tarry Company inventory reported above. $ 0 Inventory valuation for edgers Inventory valuation for hedge clippers Total inventory valuation 0 $ 0
b. Prepare the entry, if any, to report inventory at the lower-of-cost-or-market. Assume that all adjustments directly impact cost of goods sold and inventory.
Account Name Dr. Cr.
0 0
0 0
Please answer all parts of the question.