Question

The inventory of Blue Company on December 31, 2017, consists of the following items. Part Quantity Cost per Unit Net Realizable Value 110 640 $126 $133 111 1,100 80 69 112 450 106 101 113 190 226 239 120 410 273 277 121 a 1,700 21 1 122 320 319 313 a Part No. 121 is obsolete and has a realizable value of $1 each as scrap. (a) Determine the inventory as of December 31, 2017, by the LCNRV method, applying this method to each item. Inventory as of December 31, 2017 $ (b) Determine the inventory by the LCNRV method, applying the method to the total of the inventory. Inventory as of December 31, 2017

Answer 1

Part no.	Quantity	Cost	NRV	Total cost	Total NRV	Lower of cost or NRV
110	640	126	133	80,640	85,120	80,640
111	1,100	80	69	88,000	75,900	75,900
112	450	106	101	47,700	45,450	45,450
113	190	226	239	42,940	45,410	42,940
120	410	273	277	111,930	113,570	111,930
121	1,700	21	1	35,700	1,700	1,700
122	320	319	313	102,080	100,160	100,160
Totals				508,990	467,310	458,720
Part a	Inventory value based on LCNRV - each item				458,720
Part b	Inventory value based on LCNRV - total inventory				467,310	Lower of 508,990 or 467,310