Data on the physical inventory of Satchell Co. as of December 31, 2008, are presented in the working papers. The quantity of each commodity on hand has been determined and recorded on the inventory sheet. Unit market prices have also been determined as of December 31 and recorded on the sheet. The inventory is to be determined at cost and also at the lower of cost or market, using the first in, first out method. Quantity and cost data from the last purchases invoice of the year and the next to the last purchases invoice are summarized as follows:
|
|
Last |
Next to the Last |
||
|
|
Purchases Invoice |
Purchases Invoice |
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|
|
Quantity |
Unit |
Quantity |
Unit |
|
Description |
Purchased |
Cost |
Purchased |
Cost |
|
AC172 |
30 |
$ 60 |
40 |
$ 59 |
|
BE43 |
25 |
175 |
15 |
180 |
|
CJ9 |
20 |
130 |
15 |
128 |
|
E34 |
150 |
25 |
100 |
27 |
|
F17 |
6 |
550 |
15 |
540 |
|
G68 |
75 |
14 |
100 |
13 |
|
K41 |
8 |
400 |
4 |
398 |
|
Q79 |
500 |
6 |
500 |
7 |
|
RZ13 |
65 |
22 |
50 |
21 |
|
S60 |
5 |
250 |
4 |
260 |
|
W21 |
120 |
20 |
115 |
17 |
|
XR90 |
10 |
750 |
8 |
740 |
Instructions
Record the appropriate unit costs on the inventory sheet, and complete the pricing of the inventory. When there are two different unit costs applicable to an item:
1. Draw a line through the quantity, and insert the quantity and unit cost of the last purchase.
2. On the following line, insert the quantity and unit cost of the next to the last purchase.
3. Total the cost and market columns and insert the lower of the two totals in the Lower of C or M column. The first item on the inventory sheet has been completed as an example.