Inventory Valuation and Additional Issues

The boutique has an automated perpetual inventory system that keeps track of the inventory by individual item. The boutique does not group or aggregate items for purposes of inventory valuation.

Prior to the inventory count, the allowance for inventory had a credit balance of $5,200. There are no additional selling costs or disposal costs other than the disposal costs noted in the table. The normal profit margin is 20% of the sales price.

The accountant for the boutique is trying to decide which LCM method the boutique should use. The accountant is aware that first-in, first-out lower of cost or market (FIFO LCM) is the easiest method to use but has received pressure from the boutiques external accountants to use last-in, first-out lower of cost or market (LIFO LCM).

In preparation for the questions that you will be asked on the above scenario, calculate the net realizable value of each inventory item using FIFO LCM, and then select the LCM.

In addition, calculate the ceiling and floor for the inventory and the designated market value using LIFO LCM. Once you have selected the designated market value for each inventory item, determine the LCM using LIFO LCM.

Based on this scenario and the given information, answer the following questions:

1. If the boutique uses LIFO LCM, what is the designated market value of the chairs? 
2. If the boutique uses LIFO LCM, what is the designated market value of the tables? 
3. If the boutique uses LIFO LCM, what is the designated market value of the lamps? 
4. If the boutique uses LIFO LCM, what is the designated market value of the rugs? 
5. If the boutique uses LIFO LCM, what is the LCM value of the chairs? 
6. If the boutique uses LIFO LCM, what is the LCM value of the tables? 
7. If the boutique uses LIFO LCM, what is the LCM value of the lamps? 
8. If the boutique uses LIFO LCM, what is the LCM value of the rugs? 
9. If the boutique uses FIFO LCM, what is the LCM value of the rugs? 
10. If the boutique uses FIFO LCM, what is the LCM value of the lamps? 
11. If the boutique uses FIFO LCM, what is the LCM value of the tables? 
12. If the boutique uses LIFO LCM, what is the LCM value of the chairs? 

Submitting your assignment in APA format means, at a minimum, you will need the following:

• Title page: Remember the running head. The title should be in all capitals. 
• Length: 3 pages minimum 
• Body: This begins on the page following the title page and abstract page and must be double-spaced (be careful not to triple- or quadruple-space between paragraphs). The typeface should be 12-pt. Times Roman or 12-pt. Courier in regular black type. Do not use color, bold type, or italics, except as required for APA-level headings and references. The deliverable length of the body of your paper for this assignment is 3 pages. In-body academic citations to support your decisions and analysis are required. A variety of academic sources is encouraged. 
• Reference page: References that align with your in-body academic sources are listed on the final page of your paper. The references must be in APA format using appropriate spacing, hanging indent, italics, and uppercase and lowercase usage as appropriate for the type of resource used. Remember, the Reference page is not a bibliography but a further listing of the abbreviated in-body citations used in the paper. Every referenced item must have a corresponding in-body citation.