Question

The inventory of Sunland Company on December 31, 2020, consists of the following items.

Part			Quantity		Cost per Unit		Net Realizable Value
110			560		$119.00		$125.00
111			1,060		75.00		65.00
112			550		100.00		95.00
113			220		212.50		225.00
120			440		256.00		260.00
121	a		1,700		20.00		1.00
122			290		300.00		294.00

^a Part No. 121 is obsolete and has a realizable value of $1.00 each as scrap.

(a) Determine the inventory as of December 31, 2020, by the LCNRV method, applying this method to each item.

Inventory as of December 31, 2020

$enter the Inventory as of December 31 in dollars

(b) Determine the inventory by the LCNRV method, applying the method to the total of the inventory.

Inventory as of December 31, 2020

$enter the Inventory as of December 31 in dollars

Answer 1

Solution : 1
	CALCULATION OF INVENTORY VALUE AS PER LOWER OF COST OR NET REALIZABLE VALUE
	PRODUCT	Quantity (A)	Unit Cost	Net Realizable Value	Cost of Ivnentory lower of Cost or Net Realizable Value (B)	Inventory Cost (AXB)
	110	560	$               119.00	$                      125.00	$                            119.00	$                         66,640
	111	1060	$                 75.00	$                        65.00	$                              65.00	$                         68,900
	112	550	$               100.00	$                        95.00	$                              95.00	$                         52,250
	113	220	$               212.50	$                      225.00	$                            212.50	$                         46,750
	120	440	$               256.00	$                      260.00	$                            256.00	$                       112,640
	121	1700	$                 20.00	$                           1.00	$                                1.00	$                           1,700
	122	290	$               300.00	$                      294.00	$                            294.00	$                         85,260
			Total			$                       434,140
	Answer = Inventory Value = 434,140
Solution : 2
	CALCULATION OF INVENTORY VALUE AS PER LOWER OF COST OR NET REALIZABLE VALUE
	PRODUCT	Quantity (A)	Unit Cost	Total Cost	Net Realizable Value	Inventory Cost at Realizable Value (AXB)
	110	560	$               119.00	$                      66,640	$                            125.00	$                         70,000
	111	1060	$                 75.00	$                      79,500	$                              65.00	$                         68,900
	112	550	$               100.00	$                      55,000	$                              95.00	$                         52,250
	113	220	$               212.50	$                      46,750	$                            225.00	$                         49,500
	120	440	$               256.00	$                    112,640	$                            260.00	$                       114,400
	121	1700	$                 20.00	$                      34,000	$                                1.00	$                           1,700
	122	290	$               300.00	$                      87,000	$                            294.00	$                         85,260
			Total	$                    481,530		$                       442,010
	Answer = Inventory Value = $ 442,010