Problem 1: Ezekial Distribution Co. has calculated its December 31, 2007 inventory on a FIFO basis at $250,000. The following information pertains to that inventory:
Estimated selling price $255,000
Estimated cost of disposal 10,000
Normal profit margin 30,000
Current replacement cost 225,000
Ezekial records losses that result from applying the lower-of-cost-or-market rule. At December 31, 2007, the loss that Ezekial should recognize is?
Problem 2: Summers Company had a gross profit of $360,000, total purchases of $420,000, and an ending inventory of $240,000 in its first year of operations as a retailer. Summers's sales in its first year must have been?
Problem 3: If an inventory unit has declined in value below original cost, but the market value exceeds net realizable value, the amount to be used for purposes of inventory valuation is?