Question

In: Accounting

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.

Solutions

Expert Solution

D A A*D B C=A or B C*D
Inventory Quantity Cost Cost of Inventory NRV Inventory Valuation Ending Inventory
Item A 150 29                      4,350.0 34 29                     4,350.0
Item B 50 34                      1,700.0 24 24                     1,200.0
                     6,050.0                     5,550.0
Cost of Inventory     6,050.0
Ending Inventory Valuation     5,550.0
Loss on Valuation         500.0
Loss on Valuation Dr.         500.0
To Inventory         500.0

ekkarill92 answered 2 years ago
Next > < Previous

Related Solutions

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...
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. 
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...
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...
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...
Tamarisk, Inc. uses the lower-of-cost-or-net realizable value basis for its inventory. The following data are available...
Tamarisk, Inc. uses the lower-of-cost-or-net realizable value basis for its inventory. The following data are available at December 31. Item Units Unit Cost Net Realizable Value Cameras:    Minolta 3 $180 $156    Canon 9 149 175 Light meters:    Vivitar 14 136 114    Kodak 20 117 130 Determine the amount of the ending inventory by applying the lower-of-cost-or-net realizable value basis. The ending inventory
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
Explains the (a) lower of cost or net realizable value (LCNRV) approach and the (b) lower...
Explains the (a) lower of cost or net realizable value (LCNRV) approach and the (b) lower of cost or market (LCM) approach to valuing inventory.
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT