Question

The December 31, 2017 inventory of Gwynn Company consisted of four products, for which certain information is provided below.                                                                         

                                                   Replacement           Estimated            Expected         Normal Profit

Product        Original Cost                Cost                  Disposal Cost      Selling Price         on Sales  

    A                   $24.00                   $22.00                     $6.50                   $40.00                 20%

    B                   $42.00                   $40.00                   $10.00                   $48.00                 25%

    C                 $120.00                 $115.00                   $25.00                 $190.00                 30%

    D                   $19.00                   $15.80                     $4.00                   $26.00                 10%

Instructions:Using the lower-of-cost-or-net realizable value approach applied on an individual-item basis, compute the inventory valuation that should be reported for each product on December 31, 2017.

Product	COST	NETREALIZABLE VALUE	>	LCNRV
A
B
C
D

Answer 1

	(SP- diposable cost)	(Ceiling- (SP*normal profit on sales)
Product	Ceiling	Floor	Deisgnated	Cost	Lower of cost
			Market		or NRV
A	(40-6.5)	(33.5-8)
	$33.50	$25.50	$25.50	$24.00	$24.00
B	(48-10)	(38-12)
	$38.00	$26.00	$38.00	$42.00	$38.00
C	(190-25)	(165-57)
	$165.00	$108.00	$115.00	$120.00	$115.00
D	(26-4)	(22-2.6)
	$22.00	19.4	$19.40	$19.00	$19.00

I hope my workings are enough to understand

Thanks in advance for giving me positive ratings

for any clarification feel free to comment on it

May God bless you and have a wonderful day