Question

Sparks Furniture Company carries three lines of sofas. Information about the sofa inventory as of the end of its most recent fiscal year follows. If LCM/NRV is applied to each separate product line, what is the amount of the adjustment that must be made to the company's inventory?

Answer 1

($25,500)

Step-by-step explanation:

Product Line

Cost per Unit

Market Value per Unit

Quantity

Rustic

$700

$725

190

Mediterranean

600

605

300

Contemporary

950

820

275

($25,500) as the adjustment that must be made to the company's inventory