Question - In its first month of operation, Moraine Company purchased 100 units of inven- tory for $6, then 200 units for $7, and finally 140 units for $8. At the end of the month, 180 units remained. Compute the amount of phantom profit that would result if the com- pany used FIFO rather than LIFO. Explain why this amount is referred to as phantom profit. The company uses the periodic method.
Olsson Video Center accumulates the following cost and market data at December 31.
Inventory Categories
Cameras Camcorders DVDs
Cost Data
$12,500 9,000 13,000
Market Data
$13,400 9,500 12,200
Compute the lower-of-cost-or-market valuation for Olsson inventory.