Question

In: Accounting

Kingbird Company follows the practice of pricing its inventory at the lower-of-cost-or-market, on an individual-item basis....

Kingbird Company follows the practice of pricing its inventory at the lower-of-cost-or-market, on an individual-item basis.

Item No.

Quantity

Cost per Unit

Cost to Replace

Estimated Selling Price

Cost of Completion and Disposal

Normal Profit

1320

 1,500 $3.87 $3.63 $5.45 $0.42 $1.51

1333

 1,200 3.27 2.78 4.24 0.61 0.61

1426

 1,100 5.45 4.48 6.05 0.48 1.21

1437

 1,300 4.36 3.75 3.87 0.30 1.09

1510

 1,000 2.72 2.42 3.93 0.97 0.73

1522

 800 3.63 3.27 4.60 0.48 0.61

1573

 3,300 2.18 1.94 3.03 0.91 0.61

1626

 1,300 5.69 6.29 7.26 0.61 1.21


From the information above, determine the amount of Kingbird Company inventory.

The amount of Kingbird Company’s inventory

$enter the dollar amount of Kingbird Company's inventory

Solutions

Expert Solution

Item Qty Cost per Unit Cost to replace Estimated Selling Price Cost of Completion and Disposal Normal Profit NRV NRV - Normal Profit Market Lower of Cost or Market Value of Inventry at lower of cost or market value
1320 1500 3.87 3.63 5.45 0.42 1.51 5.03 3.52 3.63 3.63 5445
1333 1200 3.27 2.78 4.24 0.61 0.61 3.63 3.02 3.02 3.02 3624
1426 1100 5.45 4.48 6.05 0.48 1.21 5.57 4.36 4.48 4.48 4928
1437 1300 4.36 3.75 3.87 0.3 1.09 3.57 2.48 3.57 3.57 4641
1510 1000 2.72 2.42 3.93 0.97 0.73 2.96 2.23 2.42 2.42 2420
1522 800 3.63 3.27 4.6 0.48 0.61 4.12 3.51 3.51 3.51 2808
1573 3300 2.18 1.94 3.03 0.91 0.61 2.12 1.51 1.94 1.94 6402
1626 1300 5.69 6.29 7.26 0.61 1.21 6.65 5.44 6.29 5.69 7397
Total ending inventory value 37665
Note 1: Market price is same as replacement cost, but if replacement cost is more than NRV then NRV will be the market value(as in 1437), Also market price should not be less then NRV-NP.otherwise NRV-Normal profit will be market price (As in Itme 1333 and Item 1522)

ekkarill92 answered 1 year ago
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