On the Basis of the Following Data for Barker Industries

question 136

Short Answer

On the basis of the following data for Barker Industries as of December 31, 2011, determine the value of the inventory at the lower of cost or market. Also, show how the merchandise inventory would appear on the balance sheet (assume that the cost was determined by the FIFO method). Apply lower of cost or market to each inventory item.
$\begin{array} { | l | l | l | l | } \hline \text { Commodity } & \text { Inventory Quantity } & \text { Unit Cost Price } & \text { Unit Market Price } \\\hline \text { Size 4 } & 9 & \$ 7 & \$ 19 \\\hline \text { Size 5 } & 10 & 17 & 14 \\\hline \text { Size 6 } & 14 & 23 & 20 \\\hline \text { Size 7 } & 12 & 13 & 15 \\\hline\end{array}$

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Definitions:

Grocer Shoppers

Individuals who purchase food and other goods at grocery stores.

Value Pricing

The practice of simultaneously increasing product and service benefits while maintaining or decreasing price.

Free On Board

A shipping term indicating that the seller bears the shipping costs and risk of loss until the goods reach the buyer’s specified location.

Origin Pricing

Pricing strategy based on the geographical location of a product's origin, considering the costs of transportation and tariffs.