Allegro Music sells musical equipment. A detailed list of allegro music is inventory follows; Inventory item...

Allegro Music sells musical equipment. A detailed list of allegro music is inventory follows;

Inventory item Number of units Cost per unit Total cost NRV per unit Total NRV LCNRV

Chime set 3 $750 $2250 $790 $2370

Cymbals 4 70 280 85 340

Drum sets 3 450 1350 525 1575

Flutes 5 650 3250 775 3875

Violins 3 1500 4500 1650 4950

Guitars 7 62 434 45 315

Guitars acoustic 9 125 1125 132 1188

Guitars electric 12 190 2280 225 2700

Key boards 4 2200 8800 2100 8400

Pianos entry 3 2300 6900 2500 7500

Pianos introductory 5 4500 22500 4900 24500

Pianos intermediate 2 12000 24000 14200 28400

Pianos professional 1 22500 22500 25000 25000

Pianos upright 2 5000 10000 7500 15000

Recorders 25 7 175 10 250

Saxophones 3 575 1725 675 2025

Triangles 5 55 275 65 325

Xylophones 4 245 980 300 1200

total $113324 $ 129913

NRV= Net realizable value

LCNRV= Lower of cost and net realizable value

Required:

complete the schedule above and prepare the year end adjusting entery to record the inventory at lower of cost and net realizable value.

Solutions

Expert Solution


Inventory items	Number of units	Cost per unit	Total Cost	NRV per unit	Total NRV	Lower of cost or NRV	Cost or NRV
Chime set	3	750	2250	790	2370	2250	Cost
Cymbals	4	70	280	85	340	280	Cost
Drum sets	3	450	1350	525	1575	1350	Cost
Flutes	5	650	3250	775	3875	3250	Cost
Violins	3	1500	4500	1650	4950	4500	Cost
Guitars	7	62	434	45	315	315	NRV
Guitars acoustic	9	125	1125	132	1188	1125	Cost
Guitars electric	12	190	2280	225	2700	2280	Cost
Key boards	4	2200	8800	2100	8400	8400	NRV
Pianos entry	3	2300	6900	2500	7500	6900	Cost
Pianos introductory	5	4500	22500	4900	24500	22500	Cost
Pianos intermediate	2	12000	24000	14200	28400	24000	Cost
Pianos professional	1	22500	22500	25000	25000	22500	Cost
Pianos upright	2	5000	10000	7500	15000	10000	Cost
Recorders	25	7	175	10	250	175	Cost
Saxophones	3	575	1725	675	2025	1725	Cost
Triangles	5	55	275	65	325	275	Cost
Xylophones	4	245	980	300	1200	980	Cost
Total			$113,324		$129,913

Since there is decline in the value of Guitars and Key boards,hence we will written down the cost of these 2 to NRV

Guitars	Cost- NRV = 434-315= 119	119
Key boards	Cost- NRV = 8800-8400= 400	400
			519
Journal Entry
General Joural		Debit $	Credit $
Cost of Goods Sold		519
Inventory - Guitar		119
Inventory - Key boards		400

ekkarill92 answered 1 year ago

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