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 1 year agoRelated 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
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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.
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