Question

In: Accounting

The following information pertains to the physical inventory of Electronics Unlimited taken at December 31: Per...

The following information pertains to the physical inventory of Electronics Unlimited taken at December 31:

Per Unit
  Product Units on Hand Cost NRV
  Audio equipment:
     Wireless audio receivers 329 $195    $184   
     Touchscreen MP3 players 244 199    219   
     Audio mixers 310 189    173   
     Audio stands 188 81    99   
  Video equipment:
     Televisions 464 249    294   
     1GB video cards 275 167    179   
     Satellite video recorders 196 609    614   
  Car audio equipment:
     GPS navigators 169 167    141   
     Double-DIN Car Deck with iPod/iPhone
     Control & Aux Input		 154 209    194   


Required:
1. Calculate the LCNRV:
a. For the inventory by major group
b. For the inventory, applied separately to each product.


2. Prepare the appropriate entry, if any, for 1(a) and 1(b).

Solutions

Expert Solution

1a) Calculation of Lower of Cost or NRV by Major Group (Amounts in $)

Per Unit Total Cost
Product Units on Hand (A) Cost (B) NRV (C) Cost (A*B) NRV (A*C) Lower of Cost or NRV
Audio Equipment:
Wireless audio receivers 329 195 184 64,155 60,536
Touchscreen MP3 players 244 199 219 48,556 53,436
Audio mixers 310 189 173 58,590 53,630
Audio stands 188 81 99 15,228 18,612
Total Audio Equipments 186,529 186,214 186,214
Video Equipment:
Televisions 464 249 294 115,536 136,416
1GB video cards 275 167 179 45,925 49,225
Satellite video recorders 196 609 614 119,364 120,344
Total Video Equipments 280,825 305,985 280,825
Car Audio Equipment:
GPS navigators 169 167 141 28,223 23,829
Double-DIN Car Deck with iPod/iPhone Control & Aux Input 154 209 194 32,186 29,876
Total Car Audio Equipments 60,409 53,705 53,705
Total 527,763 520,744

1b)  Calculation of Lower of Cost or NRV seperately (Amounts in $)

Per Unit Total Cost
Product Units on Hand (A) Cost (B) NRV (C) Cost (A*B) NRV (A*C) Lower of Cost or NRV
Audio Equipment:
Wireless audio receivers 329 195 184 64,155 60,536 60,536
Touchscreen MP3 players 244 199 219 48,556 53,436 48,556
Audio mixers 310 189 173 58,590 53,630 53,630
Audio stands 188 81 99 15,228 18,612 15,228
Video Equipment:
Televisions 464 249 294 115,536 136,416 115,536
1GB video cards 275 167 179 45,925 49,225 45,925
Satellite video recorders 196 609 614 119,364 120,344 119,364
Car Audio Equipment:
GPS navigators 169 167 141 28,223 23,829 23,829
Double-DIN Car Deck with iPod/iPhone Control & Aux Input 154 209 194 32,186 29,876 29,876
Total 527,763 512,480

2) Journal Entry (Amounts in $)

No. Account Titles Debit Credit
1(a) Cost of goods sold (527,763-520,744) 7,019
Inventory 7,019
1(b) Cost of goods sold (527,763-512,480) 15,283
Inventory 15,283

ekkarill92 answered 1 year ago
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