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%...
Inventory are stated at the lower of cost, computed using FIFO
method, and net realizable value....
Inventory are stated at the lower of cost, computed using FIFO
method, and net realizable value. Any adjustments to reduce the
cost of inventories to their net realizable value are recognized in
earnings in the current period.
Write several sentences in your own words to clearly describe
what this means based on the description provided above.