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 dealership has noticed a reduced demand for its SUVs, vans, and trucks. Problem 6-4A Part 1 Required: 1. Compute the total cost of the entire inventory. 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 dealership has noticed a reduced demand for its SUVs, vans, and trucks. Problem 6-4A Part 1 Required: 1. Compute the total cost of the entire inventory. 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 dealership has noticed a reduced demand for its SUVs, vans, and trucks. Problem 6-4A Part 1 Required: 1. Compute the total cost of the entire inventory. 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 dealership has noticed a reduced demand for its SUVs, vans, and trucks. Problem 6-4A Part 1 Required:

1. Compute the total cost of the entire inventory.

Answer 1

Answer:

Inventory	Quantity	Cost	Total
Vans	3	$             21,000	$         63,000
Trucks	6	16,800	100,800
2-door sedans	2	11,800	23,600
4-door sedans	7	15,800	110,600
Sports Cars	3	31,000	93,000
SUVs	5	27,600	138,000
Total cost of inventory	$      529,000

Inventory	Quantity	LCM/unit	Total
Vans	3	$             19,000	$         57,000
Trucks	6	15,800	94,800
2-door sedans	2	11,800	23,600
4-door sedans	7	15,800	110,600
Sports Cars	3	31,000	93,000
SUVs	5	22,000	110,000
Total	$      489,000

Where the cost of inventory is higher than the NRV, it is written down to the NRV using the following entries,

Debit Inventory write off/Cost of goods sold

Credit Inventory account

with the difference between the cost and the NRV.