A physical inventory of Helmke Company taken at December 31 reveals the following. Per Unit Item Units Cost Market Audio equipment Receivers 335 $ 90 $ 98 CD players 250 111 100 MP3 players 316 86 95 Speakers 194 52 41 Video equipment Handheld LCDs 470 150 125 VCRs 281 93 84 Camcorders 202 310 322 Car audio equipment Satellite radios 175 70 84 CD/MP3 radios 160 97 105 Required: 1. Calculate the lower of cost or market for the inventory applied separately to each item.

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

		Per Unit
Item	Units	Cost		Market
Audio equipment
Receivers	335	$	90	$	98
CD players	250		111		100
MP3 players	316		86		95
Speakers	194		52		41
Video equipment
Handheld LCDs	470		150		125
VCRs	281		93		84
Camcorders	202		310		322
Car audio equipment
Satellite radios	175		70		84
CD/MP3 radios	160		97		105

Required:

1.

Calculate the lower of cost or market for the inventory applied separately to each item. Explanation: 1.     Per Unit                                   Item Units Cost Market Total Cost Total Market LCM applied to Items     Audio equipment                              Receivers 335    $ 90     $ 98     $ 30,150   $ 32,830   $ 30,150           CD players 250      111       100       27,750     25,000     25,000           MP3 players 316      86       95       27,176     30,020     27,176           Speakers 194      52       41       10,088     7,954     7,954        Video equipment                              Handheld LCDs 470      150       125       70,500     58,750     58,750           VCRs 281      93       84       26,133     23,604     23,604           Camcorders 202      310       322       62,620     65,044     62,620        Car audio equipment                              Satellite radios 175      70       84       12,250     14,700     12,250           CD/MP3 radios 160      97       105       15,520     16,800     15,520                          Total           $ 282,187       $ 263,024                        Lower of cost or market for inventory applied separately = $263,024 2. To adjust inventory cost to market. $19,163 = $282,187 − $263,024