| A local Chevrolet dealership carries the following types of vehicles: |
| Inventory Items | Quantity | Cost per Unit |
Market (replacement cost) per Unit |
| Vans | 3 | $22,000 | $20,000 |
| Trucks | 6 | 17,000 | 16,000 |
| 2 door sedans | 2 | 12,000 | 14,000 |
| 4 door sedans | 7 | 16,000 | 19,000 |
| Sports cars | 3 | 32,000 | 35,000 |
| SUVs | 5 | 28,000 | 23,000 |
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| Because of recent increases in gasoline prices, the car dealership has noticed a reduced demand for its SUVs, vans, and trucks. |
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5.value:
2.00 points
Problem 6 4A Part 1
| Required: | |
| 1. | Compute the total cost of the entire inventory.(Omit the “$” sign in your response.) |
| Total cost | $ |
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6.value:
2.00 points
Problem 6 4A Part 2
| 2. | Determine whether each inventory item would be reported at cost or market and then determine the total cost of the entire inventory items.(Omit the “$” sign in your response.) |
| Inventory Items | Lower of Cost or Market |
Total |
| Vans | $ | $ |
| Trucks | ||
| 2 door sedans | ||
| 4 door sedans | ||
| Sports cars | ||
| SUVs | ||
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| Total | $ | |
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7.value:
1.00 points
Problem 6 4A Part 3
| 3. | Prepare necessary entry to write down inventory from cost to market value.(Omit the “$” sign in your response.) |
| General Journal | Debit | Credit |
| (Click to select)Cost of goods soldPurchases freight inInterest expensePurchase returnsCashAccounts payableSales returnsInventory | ||
| (Click to select)CashCost of goods soldSales returnsPurchases freight inPurchase returnsAccounts payableInterest expenseInventory | ||
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check my workeBook Linkreferences