Question
In: Accounting
Determining Lower of Cost or Net Realizable Value (NRV) Crane Company had the following inventory at...
Determining Lower of Cost or Net Realizable Value (NRV)
Crane Company had the following inventory at December 31, 2017.
| Unit Price | |||
|---|---|---|---|
| Quantity | Cost | NRV | |
| Desks | |||
| Model 9001 | 74 | $190 | $210 |
| Model 9002 | 49 | 280 | 268 |
| Model 9003 | 24 | 350 | 360 |
| Cabinets | |||
| Model 7001 | 124 | 60 | 64 |
| Model 7002 | 84 | 95 | 88 |
| Model 7003 | 54 | 130 | 126 |
a. Determine the ending inventory amount by applying the net
realizable value rule to:
1. Each item of inventory.
$Answer
2. Each major category of inventory.
$Answer
3. Total inventory.
$Answer
Solutions
Expert Solution
Requirement A1
Answer----------$57,228
| Quantity | Cost per unit | NRV per unit | Total cost | Total NRV | Lower of cost or NRV applied on each item | |
| Desks | ||||||
| Model 9001 | 74 | $ 190.00 | $ 210.00 | $ 14,060.00 | $ 15,540.00 | $ 14,060.00 |
| Model 9002 | 49 | $ 280.00 | $ 268.00 | $ 13,720.00 | $ 13,132.00 | $ 13,132.00 |
| Model 9003 | 24 | $ 350.00 | $ 360.00 | $ 8,400.00 | $ 8,640.00 | $ 8,400.00 |
| Cabinets | ||||||
| Model 7001 | 124 | $ 60.00 | $ 64.00 | $ 7,440.00 | $ 7,936.00 | $ 7,440.00 |
| Model 7002 | 84 | $ 95.00 | $ 88.00 | $ 7,980.00 | $ 7,392.00 | $ 7,392.00 |
| Model 7003 | 54 | $ 130.00 | $ 126.00 | $ 7,020.00 | $ 6,804.00 | $ 6,804.00 |
| Total | $ 57,228.00 |
.
Requirement A2
Answer-----------$58,312
Working
| Quantity | Cost per unit | NRV per unit | Total cost | Total NRV | Lower of cost or NRV applied on each category | |
| Desks | ||||||
| Model 9001 | 74 | $ 190.00 | $ 210.00 | $ 14,060.00 | $ 15,540.00 | |
| Model 9002 | 49 | $ 280.00 | $ 268.00 | $ 13,720.00 | $ 13,132.00 | |
| Model 9003 | 24 | $ 350.00 | $ 360.00 | $ 8,400.00 | $ 8,640.00 | |
| Cabinets | $ 36,180.00 | $ 37,312.00 | $ 36,180.00 | |||
| Model 7001 | 124 | $ 60.00 | $ 64.00 | $ 7,440.00 | $ 7,936.00 | |
| Model 7002 | 84 | $ 95.00 | $ 88.00 | $ 7,980.00 | $ 7,392.00 | |
| Model 7003 | 54 | $ 130.00 | $ 126.00 | $ 7,020.00 | $ 6,804.00 | |
| Total | $ 22,440.00 | $ 22,132.00 | $ 22,132.00 | |||
| $ 58,312.00 |
.
Requirement A3
Answer---------$58,620
Working
| Quantity | Cost per unit | NRV per unit | Total cost | Total NRV | Lower of cost or NRV applied on Total inventory | |
| Desks | ||||||
| Model 9001 | 74 | $ 190.00 | $ 210.00 | $ 14,060.00 | $ 15,540.00 | |
| Model 9002 | 49 | $ 280.00 | $ 268.00 | $ 13,720.00 | $ 13,132.00 | |
| Model 9003 | 24 | $ 350.00 | $ 360.00 | $ 8,400.00 | $ 8,640.00 | |
| Cabinets | ||||||
| Model 7001 | 124 | $ 60.00 | $ 64.00 | $ 7,440.00 | $ 7,936.00 | |
| Model 7002 | 84 | $ 95.00 | $ 88.00 | $ 7,980.00 | $ 7,392.00 | |
| Model 7003 | 54 | $ 130.00 | $ 126.00 | $ 7,020.00 | $ 6,804.00 | |
| Total | $ 58,620.00 | $ 59,444.00 | $ 58,620.00 |
ekkarill92 answered 1 year agoRelated Solutions
Determining Lower of Cost or Net Realizable Value (NRV) Crane Company had the following inventory at...
Determining Lower of Cost or Net Realizable Value
(NRV)
Crane Company had the following inventory at December 31,
2017.
Unit Price
Quantity
Cost
NRV
Desks
Model 9001
70
$190
$210
Model 9002
45
280
268
Model 9003
20
350
360
Cabinets
Model 7001
120
60
64
Model 7002
80
95
88
Model 7003
50
130
126
a. Determine the ending inventory amount by applying the net
realizable value rule to:
1. Each item of inventory.
$Answer
2. Each major category...
Determining Lower of Cost or Net Realizable Value (NRV) Crane Company had the following inventory at...
Determining Lower of Cost or Net Realizable Value
(NRV)
Crane Company had the following inventory at December 31,
2017.
Unit Price
Quantity
Cost
NRV
Desks
Model 9001
70
$190
$210
Model 9002
45
280
268
Model 9003
20
350
360
Cabinets
Model 7001
120
60
64
Model 7002
80
95
88
Model 7003
50
130
126
a. Determine the ending inventory amount by applying the net
realizable value rule to:
1. Each item of inventory.
$Answer
2. Each major category...
Home furnishings reports inventory using the lower of cost and net realizable value (NRV).
Home furnishings reports inventory using the lower of cost and net realizable value (NRV). Below is information related to its year-end inventory.
Required:
1. Calculate the total recorded cost of ending inventory before any adjustments.
2. Calculate ending inventory using the lower of cost and net realizable value.
3. Record any necessary adjustment to inventory.
4. Explain the impact of the adjustment in the financial statements.
Explain how net realizable value (NRV) is calculated and how the lower of cost of net...
Explain how net realizable value (NRV) is calculated and how the
lower of cost of net realizable value rule (LCNRV) is applied to
valuing inventory.
a)
Definition of net realizable value
b)
Alternative methods for applying the rule
c)
Describe the two alternative methods for recording adjustments
under the LCNRV method
d)
Assume that a firm has an ending inventory valued at cost of
$100,000 and at NRV at $85,000, record the journal entries for each
of the two recording...
A company reports inventory using the lower of cost and net realizable value. See the following...
A company reports inventory using the lower of cost and net
realizable value. See the following information related to its
year-end inventory:
Inventory
Quantity
Cost
NRV
Item A
150
$
29
$
34
Item B
50
34
24
a. Calculate ending inventory for the company
under the lower of cost and net realizable value.
b. Record the necessary adjusting entry to
inventory.
Janis Company correctly applies the Lower of Cost or Net Realizable Value procedure to its inventory...
Janis Company correctly applies the Lower of Cost or Net
Realizable Value procedure to its inventory on a per-unit
basis.
Information for Janis' seven products at the end of 2020 is as
follows:
Product
Quantity
Cost per unit
Selling Price
Cost to complete for sale
A
900
5.10
7.25
1.90
B
1200
4.30
5.40
1.20
C
800
7.20
8.00
0.70
D
1000
5.75
6.20
0.55
E
700
3.60
5.20
0.80
F
800
4.80
6.25
1.10
G
900
2.90
4.00
1.45...
A company reports inventory using the lower-of-cost and net realizable value. Below is information related to...
A company reports inventory using the lower-of-cost and net
realizable value. Below is information related to its year-end
inventory:
Inventory
Quantity
Cost
NRV
Unit A
10
$30
$32
Unit B
18
43
40
Unit C
12
23
27
Unit D
15
18
17
a. Calculate ending inventory under the
lower-of-cost and net realizable value.
b. Prepare the necessary adjusting entry to
inventory. (If no entry is required for a
transaction/event, select...
Tamarisk, Inc. uses the lower-of-cost-or-net realizable value basis for its inventory. The following data are available...
Tamarisk, Inc. uses the lower-of-cost-or-net realizable value
basis for its inventory. The following data are available at
December 31.
Item
Units
Unit Cost
Net Realizable Value
Cameras:
Minolta
3
$180
$156
Canon
9
149
175
Light meters:
Vivitar
14
136
114
Kodak
20
117
130
Determine the amount of the ending inventory by applying the
lower-of-cost-or-net realizable value basis.
The ending inventory
Explain the (a) lower of cost or net realizable value (LCNRV) approach and the (b) lower...
Explain the (a) lower of cost or net realizable value (LCNRV)
approach and the (b) lower of cost or market (LCM) approach to
valuing inventory. please answer in your own words, do not use the
outside resources
Explains the (a) lower of cost or net realizable value (LCNRV) approach and the (b) lower...
Explains the (a) lower of cost or net realizable value (LCNRV)
approach and the (b) lower of cost or market (LCM) approach to
valuing inventory.
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Answer must be a 100 word minimum paragraph The principle of USP can effectively highlight the...
- The parameters that determine the performance of cornstarch as thickener. How to determine these parameters？ What...
- Why would a self-assessment that gives a snapshot of confidence levels at transitions, along with personal...
- How “socially desirable response” constitutes a threat for psychological measurement? Provide an example. In scientific research,...
- True or False with these questions. (can fill with "not sure") 1. Marketing research is a...
- 24*. County Bank has the following market value balance sheet (in millions, all interest at annual...
- The Acmeville Metropolitan Bus Service currently charges $ 0.99 for an all-day ticket, and has an...
ADVERTISEMENT