Question

Flint 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 $126 $116 $100 $95 $116 $95 Cost 79 84 84 84 53 38 Cost to complete 32 32 26 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

First of all we need to find out the Net realizable value( NRV )as under

Item	Estimated selling price	Cost to complete	Selling costs	Net realizable value
	A	B	C	D=A-B-C
	126	32	11	83
Iteam E	116	32	19	65
Item F	100	26	11	63
Item G	95	37	21	37
Item H	116	32	11	73
Item I	95	32	21	42

Now we can make table for comparison between Cost and NRV as under

Item	Net realizable value	Cost	Cost or NRV
			W.E. is lower
Item D	83	79	79
Item E	65	84	65
Item F	63	84	63
Item G	37	84	37
Item H	73	53	53
Item I	42	38	38

unit value for balance sheet reporting purposes at December 31, 2017, is as under

Iteam	Unit value of invenentory
Iteam D	79
Iteam E	65
Iteam F	63
Iteam G	37
Iteam H	53
Iteam I	38