Question

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

Part			Quantity		Cost per Unit		Net Realizable Value
110			540		$130.00		$137.00
111			930		82.20		71.00
112			470		109.60		104.00
113			180		232.90		246.60
120			420		281.00		285.00
121	a		1,700		22.00		1.00
122			270		328.80		322.00

^a Part No. 121 is obsolete and has a realizable value of $1.00 each as scrap.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

Requirement a

Inventory as of December 31, 2020 = $433,692

Requirement b

Inventory as of December 31, 2020 = $441,618

Working for requirement a

Part	Units (A)	Cost per unit (B)	Net realizable value per unit (C )	Total cost (A x B)	Total net Realizable value (A x D)	Lower of cost or NRV
110	540	$         130.00	$        137.00	$    70,200.00	$        73,980.00	$    70,200.00
111	930	$            82.20	$          71.00	$    76,446.00	$        66,030.00	$    66,030.00
112	470	$         109.60	$        104.00	$    51,512.00	$        48,880.00	$    48,880.00
113	180	$         232.90	$        246.60	$    41,922.00	$        44,388.00	$    41,922.00
120	420	$         281.00	$        285.00	$ 118,020.00	$      119,700.00	$ 118,020.00
121	1700	$            22.00	$            1.00	$    37,400.00	$           1,700.00	$      1,700.00
122	270	$         328.80	$        322.00	$    88,776.00	$        86,940.00	$    86,940.00
Inventory value applying rule to each item						$ 433,692.00

.Requirement b working

Part	Units (A)	Cost per unit (B)	Net realizable value per unit (C )	Total cost (A x B)	Total net Realizable value (A x D)	Lower of cost or NRV
110	540	$         130.00	$        137.00	$    70,200.00	$        73,980.00
111	930	$            82.20	$          71.00	$    76,446.00	$        66,030.00
112	470	$         109.60	$        104.00	$    51,512.00	$        48,880.00
113	180	$         232.90	$        246.60	$    41,922.00	$        44,388.00
120	420	$         281.00	$        285.00	$ 118,020.00	$      119,700.00
121	1700	$            22.00	$            1.00	$    37,400.00	$           1,700.00
122	270	$         328.80	$        322.00	$    88,776.00	$        86,940.00
Total				$ 484,276.00	$      441,618.00	$ 441,618.00