Question

Das i wiers knowledge of increasing inventory costs? 12B Lower of cost and net realizable value LO4 Problem 6-12B Low DECK FIGURES: *FIGURES: 10. $502,546; 1b. $579.744 ine information pertains to the physical inventory of Geo Furniture Company taken at The following informati December 31: schedule reported Per Unit Units on Hand Cost NRV 430 $261 290 227 $305 256 585 320 Product Office furniture: Desks Credenzas Chairs. Bookshelves... Filing cabinets Two-drawer Four-drawer.. Lateral... Office equipment: Fax machines Copiers Typewriters.... ed from 544 355 Required 1. Calculate the LCNRV for the: 2. Inventory by major category B. Inventory, applied separately to each product. - Prepare the appropriate entry, if any, for (a) and (b).

Answer 1

Units on hand Product Per unit Cost NRV Total I LCNRV 1b.seperately for each product Cost NRV 1a. Major category 430 $ 261.00 $ 305.00 $ 290 $ 227.00 $ 256.00 $ 585 $ 49.00 $ 43.00 $ 320 $ 93.00 $ 82.00 $ $ 1,12,230.00 $ 65,830.00 $ 28,665.00 $ 29,760.00 $ 2,36,485.00$ 1,31,150.00 74,240.00 25,155.00 26,240.00 2,56,785.00 $ 1,12,230.00 65,830.00 25,155.00 26,240.00 2,36,485.00 Office furniture Desks Credenzas Chairs Bookshelves Total office furniture (A) Filing Cabinets Two-drawer Four-drawer Lateral Total filing cabinets (B) Office equipment Fax machines Copies Typewriters Total office equipment (C) Inventory Value (A) +(B)+(C) 215 $ 81.00 $ 70.00 $ 400 $ 135.00 $ 122.00 $ 178 $ 104.00 $ 118.00 $ $ 17,415.00 $ 54,000.00 $ 18,512.00 $ 89,927.00 $ 15,050.00 48,800.00 21,004.00 84,854.00 $ 15,050.00 48,800.00 18,512.00 84,854.00 415 $ 168.00 $ 200.00 $ 544 $ 317.00 $288.00 $ 355 $ 125.00 $ 117.00 $ 69,720.00 $ 1,72,448.00 $ 44,375.00 $ 2,86,543.00 $ 6,12,955.00 $ 83,000.00 1,56,672.00 41,535.00 2,81,207.00 $ 6,22,846.00 $ 69,720.00 1,56,672.00 41,535.00 $ 2,81,207.00 6,02,546.00 $ 5,79,744.00

2.a Value of inventory (Major category) is lower than its cost by $10,409, so the following journal entry is passed to write down the inventory:

Cost of Goods Sold a/c Dr $10,409

To Inventory $10,409

2.b Value of inventory (Major category) is lower than its cost by $33,211, so the following journal entry is passed to write down the inventory:

Cost of Goods Sold a/c Dr $33,211

To Inventory $33,211