Question

Ayayai Company uses the LCNRV method, on an individual-item basis, in pricing its inventory items. The inventory at December 31, 2017, consists of products D, E, F, G, H, and I. Relevant per unit data for these products appear below. Item D Item E Item F Item G Item H Item I Estimated selling price $128 $118 $102 $96 $118 $96 Cost 80 86 86 86 54 39 Cost to complete 32 32 27 37 32 32 Selling costs 11 19 11 21 11 21 Using the LCNRV rule, determine the proper unit value for balance sheet reporting purposes at December 31, 2017, for each of the inventory items above. Item D $ Item E $ Item F $ Item G $ Item H $ Item I $

Answer 1

Solution

	Inventory Value
Item D	$    80.00
Item E	$    67.00
Item F	$    64.00
Item G	$    38.00
Item H	$    54.00
Item I	$    39.00

Working

	Item D	Item E	Item F	Item G	Item H	Item I
Selling price (A)	$ 128.00	$ 118.00	$ 102.00	$    96.00	$ 118.00	$    96.00
Cost to complete (B)	$    32.00	$    32.00	$    27.00	$    37.00	$    32.00	$    32.00
Selling cost (C )	$    11.00	$    19.00	$    11.00	$    21.00	$    11.00	$    21.00
Net realizable value [A-(B+C)]	$    85.00	$    67.00	$    64.00	$    38.00	$    75.00	$    43.00
Cost (D)	$    80.00	$    86.00	$    86.00	$    86.00	$    54.00	$    39.00
Lower of cost of NRV	$    80.00	$    67.00	$    64.00	$    38.00	$    54.00	$    39.00