Brief Exercise 6-37 Lower of Cost or Market Garcia Company uses FIFO, and its inventory at the end of the year was recorded in the accounting records at $17,800. Due to technological changes in the market, Garcia would be able to replace its inventory for $16,500. Required: 1. Using the lower of cost or market method, what amount should Garcia report for inventory on its balance sheet at the end of the year? 2. Prepare the journal entry required to value the inventory at the lower of cost or market. Dec. 31 (Inventory adjustment to market value) Cornerstone Exercise 6-30 Inventory Costing Methods: Periodic FIFO (Appendix 6B) Filimonov Inc. has the following information related to purchases and sales of one of its inventory items: Date Description Units Purchased at Cost Units Sold at Retail June 1 Beginning Inventory 200 units @ $10 = $2,000 9 Purchase 1 300 units @ $12 = $3,600 14 Sale 1 400 units @ $25 250 units @ $14 = $3,500 22 Purchase 2 29 Sale 2 225 units @ $25 Assume that the company uses a periodic inventory system. Required: Calculate the cost of goods sold and the cost of ending inventory using the FIFO inventory costing method. Cost of goods sold A Cost of ending inventory A
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