Prak Masters Prepared the Following Analysis of Its Year-End Inventory

question 1

Essay

Prak Masters prepared the following analysis of its year-end inventory on June 30th:
$\begin{array}{llll}&&\text { Cost } & \text { Market value }\\\text { Product } & \text { Quantity } & \text { per unit } & \text { per unit } \\\hline\mathrm{A} & 17 & \$ 430 & \$ 499 \\\mathrm{B} & 140 & 325 & 299 \\\mathrm{C} & 38 & 75 & 60\end{array}$ Determine the lower-of-cost-or-market value for each product in Prak Master's inventory and prepare the journal entry needed at year-end to value the inventory at LCM.

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Definitions:

Tax Withheld

The portion of an employee's income that an employer sends directly to the government as a payment of income taxes.

Federal Income Tax

The tax levied by the Internal Revenue Service on the annual earnings of individuals, corporations, trusts, and other legal entities.

FICA Tax

A U.S. federal payroll tax that funds Social Security and Medicare, requiring contributions from both employers and employees.

FUTA Tax

A federal tax in the United States imposed on employers to fund state workforce agencies and unemployment insurance.