decker company has five products in its inventory information about the december 31 492402

Decker Company has five products in its inventory. Information about the December 31, 2011, inventory follows.

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Product

Quantity

Unit Cost

Unit Replacement Cost

Unit Selling price

A

1,000

10

12

16

B

800

15

11

18

c

600

3

2

8

D

200

7

4

6

E

600

14

12

13

The selling cost for each product consists of a 15 percent sales commission. The normal profit percentage for each product is 40 percent of the selling price.

Required:
1. Determine the balance sheet inventory carrying value at December 31, 2011, assuming the LCM rule is applied to individual products.

2. Determine the balance sheet inventory carrying value at December 31, 2011, assuming the LCM rule is applied to the entire inventory. Also, assuming that Decker recognizes an inventory write-down as a separate income statement item, determine the amount of the loss.

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