Question

Presented below is information related to Rembrandt Inc.’s inventory.

(per unit)	Skis	Boots	Parkas
Historical Cost	$190.00	$106.00	$53.00
Selling Price	212.00	145.00	73.75
Cost to sell	19.00	8.00	2.50
Cost to complete	32.00	29.00	21.25

Determine the following: (a) the net realizable value for each item, and (b) the carrying value of each item under LCNRV.

Answer 1

Solution

	Skis	Boots	Parkas
Net realizable value	$ 161.00	$ 108.00	$    50.00
Carrying value of Inventory	$ 161.00	$ 106.00	$    50.00

Working

	Skis	Boots	Parkas
Selling price (A)	$ 212.00	$ 145.00	$    73.75
Cost to complete (B)	$    32.00	$    29.00	$    21.25
Selling cost (C )	$    19.00	$       8.00	$       2.50
Net realizable value [A-(B+C)]	$ 161.00	$ 108.00	$    50.00
Cost (D)	$ 190.00	$ 106.00	$    53.00
Carrying value of Inventory	$ 161.00	$ 106.00	$    50.00