Question

Part 1,2 and 3 of the SAME problem, not separate problems.
Part 1 of 3 Required Information [The following information applies to the questions displayed below.] A local Chevrolet dealership carries the following types of vehicles: points Quantity Inventory Items Vans Trucks 2-door sedans 4-door sedans Sports cars SUVS он ур Unit Cost $ 22,500 17,100 12,100 16,100 32,500 28,200 Unit NRV $20,500 16,190 14,100 19, 180 35,500 23,500 eBook Print Because of recent increases in gasoline prices, the car dealership has noticed a reduced demand for its SUVs, vans, and trucks. References Required: 1. Compute the total cost of the entire inventory. Total cost

Answer 1

_ᎯpᎧᎧ . Principle of lower of Cost on NRV - Principle of lower of cost ou NRV is for the calculation of value of enting inventing reportel at the ent. It is based on the onsewatem principle which says no income and gains to be understylel qol no qraels and expenses to be anleusty bed, Computation of _Total Git of the Enlive Inventory Total cost of the inventory is calculated by the number of unit in hand multipled by the unit cost of prolactate Toby) Cost = Nynter of units in hand X Unit Cout Inventory _Schedule_of_Totyl cost of Endling Inuen bary Items I Quantity in Hand I unit Cast I Total cost J - 6x6 Vaas 4 Trucks 2-door Sedans 4-door sesgos Sports Car 22500 17100 12100 16100 *2500 90000 19 100 36300 Pogoo 324VO Igloo 28 200 Total cost of Entjie apuroboy 528200

Determination of each item whether reported of cust or net realisable valye (NRO) _ As discussed above the iquenbery should be reported on the basis of lower of cost ov neb realiogle value of the inventory. Schedule of Ench_Inventory. I bem whethe kepoube/ - on cost of net realisable value Inventory | Cest on I NRU lower of Got and NRU Perugit THOS I Quantity Toby) i hant] C Cad Vans NRU 2050O NRU Trucks 2-doa selans. 4 door Selaus Spouls au suu's Cost Cost Gst Jojoo 12100 16.00 82000 112700 36goo 805DO 3250o 148000 32 Sbo NRV 230o Totul 4850 oo Laljishing enby_for inventary to corite down inuentory_fren cost to Neð Realisable Valle According to the principle of conservatism, the inventory should be valued at lower of cost on NRV. In the question we have found that Net realisable value of Inventas is lower than the cost of inventory be d also ie (528200 - 485000). There have an organisite should have to adjust the inventory at the year ens.

Chevzolet Dealershie Alivsting Toying! Enly for Invertory Particy) qui | Debit ($1 uelit SL. 431-00 Cast - of Gools soll Alo To Inventory Alc 43200 To byl 43200 43 Loo