Question

Finished Desks		A		B		C		D
2017 catalog selling price		$ 448		$ 496		$ 914		$ 1,035
FIFO cost per inventory list 12/31/17		484		455		834		974
Estimated cost to complete and sell		51		124		270		207
2018 catalog selling price		506		565		914		1,216

Splish Company manufactures desks. Most of the company’s desks are standard models and are sold on the basis of catalog prices. At December 31, 2017, the following finished desks (10 desks in each category) appear in the company’s inventory.

The 2017 catalog was in effect through November 2017, and the 2018 catalog is effective as of December 1; catalog prices are net of the usual discounts.

At what amount should each of the four desks appear in the company’s December 31, 2017, inventory, assuming that the company has adopted a lower-of-FIFO-cost-or-net realizable value (LCNRV) approach for valuation of inventories on an individual-item basis?

Answer 1

Finished Desks	A	B	C	D
2017 catalog selling price	448	496	914	1,035
FIFO cost per inventory list 12/31/17	484	455	834	974
Estimated cost to complete and sell	51	124	270	207
2018 catalog selling price	506	565	914	1,216
2018 catalog selling price	506	565	914	1,216
Less: Estimated cost to complete and sell	(51)	(124)	(270)	(207)
Net realizable value	455	441	644	1,009
FIFO cost per inventory list 12/31/17	484	455	834	974
Net realizable value	455	441	644	1,009
Inventory value (Lower of Above)	455	441	644	974
Inventory value (Lower of Above)	455	441	644	974
Multiply: finished desks	10	10	10	10
Total inventory	$       4,550	$       4,410	$       6,440	$         9,740
Total inventory (Total of A,B,C,D)				$       25,140