Data on the physical inventory of Cinnabar Co. as of December 31, 2007, are presented below.
|
Description
|
InventoryQuantity
|
Unit MarketPrice
|
|
A90
|
35
|
$ 57
|
|
C18
|
16
|
200
|
|
D41
|
24
|
140
|
|
E34
|
125
|
26
|
|
F17
|
18
|
550
|
|
G68
|
60
|
15
|
|
K41
|
5
|
390
|
|
Q79
|
375
|
6
|
|
R72
|
100
|
17
|
|
S60
|
6
|
235
|
|
W21
|
140
|
18
|
|
Z35
|
9
|
700
|
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
|
Description
|
QuantityPurchased
|
UnitCost
|
QuantityPurchased
|
UnitCost
|
|
A90
|
25
|
$ 59
|
30
|
$ 58
|
|
C18
|
35
|
206
|
20
|
205
|
|
D41
|
10
|
144
|
25
|
142
|
|
E34
|
150
|
25
|
100
|
24
|
|
F17
|
10
|
565
|
10
|
560
|
|
G68
|
100
|
15
|
100
|
14
|
|
K41
|
10
|
385
|
5
|
384
|
|
Q79
|
500
|
6
|
500
|
6
|
|
R72
|
80
|
20
|
50
|
18
|
|
S60
|
5
|
250
|
4
|
260
|
|
W21
|
100
|
20
|
75
|
19
|
|
Z35
|
7
|
701
|
6
|
699
|
Instructions
Determine the inventory at cost and also at the lower of cost or market, using the first-in, first- out method. Record the appropriate unit costs on an inventory sheet and complete the pricing of the inventory. When there are two different unit costs applicable to an item, proceed as follows:
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.