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Question(s) / Instruction(s):

A physical inventory of Helmke Company taken at December 31 reveals the following.

                                                                                                Per Unit

  Item                                                    Units                     Cost                       Market

   Audio equipment                                                                        

   Receivers                                         339                         $94                         $102  

   CD players                                        254                         115                         104  

       MP3 players                                320                         90                           99   

       Speakers                                      198                         56                           45  

  Video equipment                                                                         

       Handheld LCDs                           474                         154                         129  

       VCRs                                               285                         97                           88  

       Camcorders                                 206                         314                         326  

  Car audio equipment                                                                  

       Satellite radios                           179                         74                           88  

       CD/MP3 radios                           164                         101                         109  

Required:

1.            Calculate the lower of cost or market for the inventory applied separately to each item.

2.            If the market amount is less than the recorded cost of the inventory, then record the LCM adjustment to the Merchandise Inventory account.

 

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