Question

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 is applied to (a) individual products, (b) product categories, and (c) total inventory.
2. Assuming that the company reports an inventory write-down as a line item in the income statement, for each of the LCNRV applications determine the amount of the loss.

Lower of cost and NRV
Net By By
Realizable Individual Product By Total
Product Cost Value Products Type Inventory
Tools:
Hammers
Saws
Screwdrivers
Total tools
Paint products:
1-gallon cans
Paint brushes
Total paint
Total

(a)Individual products

(b)Product categories

(c)Total inventory

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1
Req 1:
By Ind. By Product By Total
Product Cost NRV Product Type Inventory
Tools:
Hammer 624 684 624
Saws 2244 2024 2024
Screwdrivers 704 896 704
Total Tools 3572 3604 3572
Paint Products:
1-Gallon Cans 3224 2704 2704
Paint Brushes 504 564 504
Total Paint 3728 3268 3268
Total 7300 6872 6560 6840 6872
Req 2:
WRITE DOWNS
By Individual: 740 (7300-6560)
By product type: 460 (7300-6840)
By Total Inventory: 428 (7300-6872)
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
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...
A home improvement store carries the following items: Inventory Items Quantity Cost per Unit NRV per...
A home improvement store carries the following items: Inventory Items Quantity Cost per Unit NRV per Unit Hammers 110 $ 6 $ 7 Saws 60 11 9 Screwdrivers 120 3 2 Drills 50 22 21 1-gallon paint cans 150 5 6 Paint brushers 170 7 8 Required: ALL PARTS ANSWERED Compute the total cost of inventory. Determine whether each inventory item would be reported at cost or net realizable value. Multiply the quantity of each inventory item by the appropriate...
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...
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...
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...
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...
The inventory of Royal Decking consisted of five products. Information about the December 31, 2018, inventory...
The inventory of Royal Decking consisted of five products. Information about the December 31, 2018, inventory is as follows: Per Unit Product Cost Selling Price A $ 140 $ 160 B 180 200 C 140 180 D 100 150 E 60 80 Costs to sell consist of a sales commission equal to 10% of selling price and shipping costs equal to 5% of cost. Required: What unit value should Royal Decking use for each of its products when applying the...
Problem 4 (Chapter 6) At December 31, 2020, the following information was available for the Bugalow...
Problem 4 (Chapter 6) At December 31, 2020, the following information was available for the Bugalow Company: ending inventory $40,000, beginning inventory $56,000, cost of goods sold $270,000, sales revenue $380,000. Calculate inventory turnover and days in inventory for Bugalow Company. Problem 5 (Chapter 6) The Simmons Company sells three categories of tools (small, medium, and large). The cost and net realizable value of its inventory of tools are listed below. Determine the value of the company’s inventory under the...
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%...
The December 31, 2017 inventory of Gwynn Company consisted of four products, for which certain information...
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
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT