Question

The inventory of Oheto Company on December 31, 2020, consists of the following items. Part Quantity...

The inventory of Oheto Company on December 31, 2020, consists of the following items.

Part

Quantity

Cost per Unit

Net Realizable Value

110

600 $95.00 $100.00

111

1,000 60.00 52.00

112

500 80 76.00

113

200 170 180.00

120

400 205.00 208.00

121

a

1,600 16.00 1.00

122

300 240 235.00


a Part No. 121 is obsolete and has a realizable value of $1.00 each as scrap.

(a) Determine the inventory as of December 31, 2020, by the LCNRV method, applying this method to each item.

Inventory as of December 31, 2020

$enter the Inventory as of December 31 in dollars


(b) Determine the inventory by the LCNRV method, applying the method to the total of the inventory.

Inventory as of December 31, 2020

$enter the Inventory as of December 31 in dollars

Homework Answers

Answer #1
Part No. Quantity Per Unit Cost Market Total Cost Total Market Lower of Cost or Market
110 600 $95 $100 $57,000 $60,000 $57,000
111 1,000 $60 $52 $60,000 $52,000 $52,000
112 500 $80 $76 $40,000 $38,000 $38,000
113 200 $170 $180 $34,000 $36,000 $34,000
120 400 $205 $208 $82,000 $83,200 $82,000
121a 1,600 $16 $1 $25,600 $1,600 $1,600
122 300 $240 $235 $72,000 $70,500 $70,500
$370,600 $341,300 $335,100

a) The valuation of inventory as of December 31, 2020, by the lower of cost or market method, as applied directly to each item is $335,100

b) The valuation of inventory as of December 31, 2020, by the lower of cost or market method, as applied to total inventory is $341,300

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