Question

Problem 9-1 (Algo) Lower of cost or net realizable value; by product and by total inventory...

Problem 9-1 (Algo) Lower of cost or net realizable value; by product and by total inventory [LO9-1] Decker Company has five products in its inventory. Information about the December 31, 2021, inventory follows. Product Quantity Unit Cost Unit Selling Price A 1,300 $ 16 $ 22 B 1,100 21 24 C 900 3 8 D 500 7 6 E 900 20 19 The cost to sell for each product consists of a 10 percent sales commission.

Required:

1. Determine the carrying value of inventory at December 31, 2021, assuming the lower of cost or net realizable value (LCNRV) rule is applied to individual products.

2. Determine the carrying value of inventory at December 31, 2021, assuming the LCNRV rule is applied to the entire inventory.

3. Assuming inventory write-downs are common for Decker, record any necessary year-end adjusting entry based on the amount calculated in requirement 2.

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Solution 1.

Carrying Value of Inventory lower of cost or NRV

Solution 2.

Carrying Value of Inventory Assuming the LCNRV rule is applied to the entire inventory

Solution 3.

No entry required as there was no written down in requirement 2.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Tatum Company has four products in its inventory. Information about the December 31, 2018, inventory is...
Tatum Company has four products in its inventory. Information about the December 31, 2018, inventory is as follows: Product Total Cost Total Net Realizable Value 101 $ 150,000 $ 115,000 102 105,000 125,000 103 75,000 65,000 104 45,000 65,000 Required: 1. Determine the carrying value of inventory at December 31, 2018, assuming the lower of cost or net realizable value (LCNRV) rule is applied to individual products. 2. Assuming that inventory write-downs are common for Tatum Company, record any necessary...
Forester Company has five products in its inventory. Information about the December 31, 2021, inventory follows....
Forester Company has five products in its inventory. Information about the December 31, 2021, inventory follows. Product Quantity Unit Cost Unit Replacement Cost Unit Selling Price A 700 $ 21 $ 23 $ 27 B 1,000 26 22 29 C 900 14 13 19 D 600 18 15 17 E 500 25 23 24 The cost to sell for each product consists of a 20 percent sales commission. The normal profit for each product is 40 percent of the selling...
Product Cost Replacement cost NRV NRV - NP Market Inventory Value 101 $152,000 $138,800 102 113,000...
Product Cost Replacement cost NRV NRV - NP Market Inventory Value 101 $152,000 $138,800 102 113,000 106,700 103 75,300 50,200 104 38,300 35,700 Totals $378,600 $0 Tatum Company has four products in its inventory. Information about the December 31, 2018, inventory is as follows: Product Total Cost Total Replacement Cost Total Net Realizable Value 101 $ 152,000 $ 138,800 $ 126,200 102 113,000 106,700 138,100 103 75,300 50,200 63,400 104 38,300 35,700 64,100 The normal gross profit percentage is 35%...
SLR Corporation has 2,400 units of each of its two products in its year-end inventory. Per...
SLR Corporation has 2,400 units of each of its two products in its year-end inventory. Per unit data for each of the products are as follows: Product 1 Product 2 Cost $ 78 $ 48 Selling price 140 50 Costs to sell 10 4 Determine the carrying value of SLR’s inventory assuming that the lower of cost or net realizable value (LCNRV) rule is applied to individual products. What is the before-tax income effect of the LCNRV adjustment?
Almaden Hardware Store sells two product categories, tools and paint products. Information pertaining to its 2021...
Almaden Hardware Store sells two product categories, tools and paint products. Information pertaining to its 2021 year-end inventory is as follows: Inventory, by Product Category Quantity Per Unit Cost Net Realizable Value Tools: Hammers 110 $ 5.40 $ 5.90 Saws 240 10.40 9.40 Screwdrivers 340 2.40 3.00 Paint products: 1-gallon cans 540 6.40 5.40 Paint brushes 110 4.40 4.90 Required: 1. Determine the carrying value of inventory at year-end, assuming the lower of cost or net realizable value (LCNRV) rule...
Identifying a Loss in Applying Lower-of-Cost-or-Net Realizable Value Information related to three products of Adelle Corporation...
Identifying a Loss in Applying Lower-of-Cost-or-Net Realizable Value Information related to three products of Adelle Corporation follows. Product A. Product B Product C Estimated Selling Price. $56 $70 $78 Original Cost (FIFO) 42 56 50 Cost of Disposal 6 11 8 Cost of Completion 14 0 6 a. What inventory value is reported in the balance sheet for total inventory under the lower-of-cost-or-net realizable value rule assuming each individual item is evaluated? Product A inventory Value $ _______ Product B...
Tatum Company has four products in its inventory. Information about the December 31, 2018, inventory is...
Tatum Company has four products in its inventory. Information about the December 31, 2018, inventory is as follows: Product Total Cost Total Replacement Cost Total Net Realizable Value 101 $ 146,000 $ 133,400 $ 121,200 102 108,600 102,500 132,700 103 72,300 48,200 60,800 104 36,700 34,300 61,500 The normal gross profit percentage is 35% of total cost. Required: 1. Determine the carrying value of inventory at December 31, 2018, assuming the lower of cost or market (LCM) rule is applied...
Calabogie Camera Shop Ltd. reports the following cost and net realizable value information for its inventory...
Calabogie Camera Shop Ltd. reports the following cost and net realizable value information for its inventory at December 31: Cameras: Units Unit Cost Unit NRV Sony 4 $175 $160 Canon 8 150 152 Light Maters: Gossen 12 135 139 Sekonic 10 115 110 a) Determine the lower of cost and net realizable value of the ending inventory b) Prepare the adjusting journal entry required, If any, to record the lower of cost and net realizable value of the inventory assuming...
Almaden Hardware Store sells two product categories, tools and paint products. Information pertaining to its 2018...
Almaden Hardware Store sells two product categories, tools and paint products. Information pertaining to its 2018 year-end inventory is as follows: Inventory, by Product Category Quantity Per Unit Cost Net Realizable Value Tools: Hammers 120 $ 5.20 $ 5.70 Saws 220 10.20 9.20 Screwdrivers 320 2.20 2.80 Paint products: 1-gallon cans 520 6.20 5.20 Paint brushes 120 4.20 4.70 Required: 1. Determine the carrying value of inventory at year-end, assuming the lower of cost or net realizable value (LCNRV) rule...
Lower-of-Cost-or-Market Inventory On the basis of the following data, determine the value of the inventory at...
Lower-of-Cost-or-Market Inventory On the basis of the following data, determine the value of the inventory at the lower of cost or market. Assemble the data in the form illustrated in Exhibit 10. Product Inventory Quantity Cost Per Unit Market Value per Unit (Net Realizable Value) Class 1: Model A 18 $108 $84 Model B 21   88 85 Model C 47 201   196 Class 2: Model D 17   67   48 Model E 28 210 185 a. Determine the value of the...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT