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...
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Home furnishings reports inventory using the lower of cost and net realizable value (NRV). Below is information related to its year-end inventory.
Required:
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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
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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
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NRV
Item A
150
$
29
$
34
Item B
50
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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...
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A company reports inventory using the lower-of-cost and net
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inventory:
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Quantity
Cost
NRV
Unit A
10
$30
$32
Unit B
18
43
40
Unit C
12
23
27
Unit D
15
18
17
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December 31.
Item
Units
Unit Cost
Net Realizable Value
Cameras:
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3
$180
$156
Canon
9
149
175
Light meters:
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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
PER UNIT Inventory Quantity Cost Net Realizable Value(NRV) Class 1 Snowman A 50 100 120 Snowman...
PER UNIT
Inventory
Quantity
Cost
Net Realizable Value(NRV)
Class 1
Snowman A
50
100
120
Snowman B
30
150
140
Class 2
Sleigh A
120
90
100
Sleigh B
60
130
140
Sleigh C
40
200
150
Develop a table below to compute the amount of
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Explain the (a) lower of cost or net realizable value (LCNRV) approach and the (b) lower...
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