Question

The inventory for Ji-Leng Company on 12/31/17 consists of the following items: Part No. Quantity Cost...

The inventory for Ji-Leng Company on 12/31/17 consists of the following items:

Part No. Quantity Cost per Unit Replacement Cost per Unit
1062 900 $135 $150
1153 1500 90 78
1249 750 120 114
1350 300 255 270
Required: Please show all calculations

a) Determine the lower-of-cost-or-net-realizable-value value of the inventory by applying the valuation method to each item.

b) Determine the lower-of-cost-or-net-realizable-value value of the inventory by applying the valuation method to the total inventory (ie: to the inventory in whole, not by each item).

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Answer #1

Calculate following

Part No Quantity Cost NRV Lower of Cost and NRV
1062 900 121500 135000 121500
1153 1500 135000 117000 117000
1249 750 90000 85500 85500
1350 300 76500 81000 76500
Total 423000 418500 400500

a) Inventory value = $400500

b) Inventory value = 418500

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