AC3225: Week 4 Depreciation Methods and Inventory Valuation
Lab 4.1/Inventory Valuation, Depreciation of Assets, and Intangible Assets

Solve the problems given below. Click here to download and save the templates that you must use to perform this week’s lab. 1. Remmers Company manufactures desks. Most of the company’s desks are standard models and are sold on the basis of catalog prices. At December 31, 2012, the following finished desks appear in the company’s inventory. Finished Desks 2012 catalog selling price FIFO cost per inventory list 12/31/12 Estimated current cost to manufacture (at December 31, 2012, and early 2013) Sales commissions and estimated other costs of disposal 2013 catalog selling price $500 $540 $900 $1,200 $50 $60 $80 $130 $460 $430 $610 $1,000 $470 $450 $830 $960 A $450 B $480 C $900 D $1,050

The 2012 catalog was in effect through November 2012, and the 2013 catalog is effective as of December 1, 2012. All catalog prices are net of the usual discounts. Generally, the company attempts to obtain a 20% gross profit on selling price and has usually been successful in doing so. Instructions At what amount should each of the four desks appear in the company’s December 31, 2012, inventory, assuming that the company has adopted a lower-of-FIFO-cost-or-market approach for valuation of inventories on an individual-item basis?

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AC3225: Week 4 Depreciation Methods and Inventory Valuation
Lab 4.1/Inventory Valuation, Depreciation of Assets, and Intangible Assets

Source: Kieso, E. D., Weygand, J. J. & Warfield, D. T. (2011). Intermediate Accounting (14th ed.). Indianapolis, IN: Wiley. 2. Presented below is information related to Waveland Inc. Cost Inventory, 12/31/12 Purchases Purchase returns Purchase discounts Gross sales (after employee discounts) Sales returns Markups Markup cancellations Markdowns Markdown cancellations Freight-in