Lower of cost or market

ABC Company began its operations in early 2008. The company carries five different types of inventory which are listed below along with other relevant data. The company values its inventory at the lower of cost or market. At December 31, 2008, ABC Company has exactly one unit of each item in ending inventory.



1. Complete the following information using the lower-of-cost-or-market method as of December 31, 2008.



2. Compute the inventory loss, if any, 49ers should show in 2008 using the lower-of-cost-or-market method applied on an individual items basis.

3. Prepare the adjusting entry, if any, required as of December 31, 2008, assuming all such entries are made directly to the inventory account.

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