Question
In: Accounting
Home furnishings reports inventory using the lower of cost and net realizable value (NRV).
Home furnishings reports inventory using the lower of cost and net realizable value (NRV). Below is information related to its year-end inventory.
Required:
1. Calculate the total recorded cost of ending inventory before any adjustments.
2. Calculate ending inventory using the lower of cost and net realizable value.
3. Record any necessary adjustment to inventory.
4. Explain the impact of the adjustment in the financial statements.
Solutions
ekkarill92 answered 2 years agoRelated Solutions
A company reports inventory using the lower of cost and net realizable value. See the following...
A company reports inventory using the lower of cost and net
realizable value. See the following information related to its
year-end inventory:
Inventory
Quantity
Cost
NRV
Item A
150
$
29
$
34
Item B
50
34
24
a. Calculate ending inventory for the company
under the lower of cost and net realizable value.
b. Record the necessary adjusting entry to
inventory.
Determining Lower of Cost or Net Realizable Value (NRV) Crane Company had the following inventory at...
Determining Lower of Cost or Net Realizable Value
(NRV)
Crane Company had the following inventory at December 31,
2017.
Unit Price
Quantity
Cost
NRV
Desks
Model 9001
70
$190
$210
Model 9002
45
280
268
Model 9003
20
350
360
Cabinets
Model 7001
120
60
64
Model 7002
80
95
88
Model 7003
50
130
126
a. Determine the ending inventory amount by applying the net
realizable value rule to:
1. Each item of inventory.
$Answer
2. Each major category...
Determining Lower of Cost or Net Realizable Value (NRV) Crane Company had the following inventory at...
Determining Lower of Cost or Net Realizable Value
(NRV)
Crane Company had the following inventory at December 31,
2017.
Unit Price
Quantity
Cost
NRV
Desks
Model 9001
70
$190
$210
Model 9002
45
280
268
Model 9003
20
350
360
Cabinets
Model 7001
120
60
64
Model 7002
80
95
88
Model 7003
50
130
126
a. Determine the ending inventory amount by applying the net
realizable value rule to:
1. Each item of inventory.
$Answer
2. Each major category...
Determining Lower of Cost or Net Realizable Value (NRV) Crane Company had the following inventory at...
Determining Lower of Cost or Net Realizable
Value (NRV)
Crane Company had the following inventory at December 31,
2017.
Unit Price
Quantity
Cost
NRV
Desks
Model 9001
74
$190
$210
Model 9002
49
280
268
Model 9003
24
350
360
Cabinets
Model 7001
124
60
64
Model 7002
84
95
88
Model 7003
54
130
126
a. Determine the ending inventory amount by applying the net
realizable value rule to:
1. Each item of inventory.
$Answer
2. Each major category...
A company reports inventory using the lower-of-cost and net realizable value. Below is information related to...
A company reports inventory using the lower-of-cost and net
realizable value. Below is information related to its year-end
inventory:
Inventory
Quantity
Cost
NRV
Unit A
10
$30
$32
Unit B
18
43
40
Unit C
12
23
27
Unit D
15
18
17
a. Calculate ending inventory under the
lower-of-cost and net realizable value.
b. Prepare the necessary adjusting entry to
inventory. (If no entry is required for a
transaction/event, select...
Explain how net realizable value (NRV) is calculated and how the lower of cost of net...
Explain how net realizable value (NRV) is calculated and how the
lower of cost of net realizable value rule (LCNRV) is applied to
valuing inventory.
a)
Definition of net realizable value
b)
Alternative methods for applying the rule
c)
Describe the two alternative methods for recording adjustments
under the LCNRV method
d)
Assume that a firm has an ending inventory valued at cost of
$100,000 and at NRV at $85,000, record the journal entries for each
of the two recording...
Problem 6-4A Report inventory using lower of cost and net realizable value (LO6-6) Skip to question...
Problem 6-4A Report inventory using lower of cost and net
realizable value (LO6-6) Skip to question [The following
information applies to the questions displayed below.] A local
Chevrolet dealership carries the following types of vehicles: Unit
Unit Inventory Items Quantity Cost NRV Vans 3 $ 21,000 $ 19,000
Trucks 6 16,800 15,800 2-door sedans 2 11,800 13,800 4-door sedans
7 15,800 18,800 Sports cars 3 31,000 34,000 SUVs 5 27,600 22,000
Because of recent increases in gasoline prices, the car...
Janis Company correctly applies the Lower of Cost or Net Realizable Value procedure to its inventory...
Janis Company correctly applies the Lower of Cost or Net
Realizable Value procedure to its inventory on a per-unit
basis.
Information for Janis' seven products at the end of 2020 is as
follows:
Product
Quantity
Cost per unit
Selling Price
Cost to complete for sale
A
900
5.10
7.25
1.90
B
1200
4.30
5.40
1.20
C
800
7.20
8.00
0.70
D
1000
5.75
6.20
0.55
E
700
3.60
5.20
0.80
F
800
4.80
6.25
1.10
G
900
2.90
4.00
1.45...
PER UNIT Inventory Quantity Cost Net Realizable Value(NRV) Class 1 Snowman A 50 100 120 Snowman...
PER UNIT
Inventory
Quantity
Cost
Net Realizable Value(NRV)
Class 1
Snowman A
50
100
120
Snowman B
30
150
140
Class 2
Sleigh A
120
90
100
Sleigh B
60
130
140
Sleigh C
40
200
150
Develop a table below to compute the amount of
any adjustment that is required to inventory by individual type of
item and by the class of inventory. Provide the journal entry for
the adjustment first by the individual amount (direct method) and
then...
Explain the (a) lower of cost or net realizable value (LCNRV) approach and the (b) lower...
Explain the (a) lower of cost or net realizable value (LCNRV)
approach and the (b) lower of cost or market (LCM) approach to
valuing inventory. please answer in your own words, do not use the
outside resources
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