Question

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

Part Quantity Cost per Unit Net Realizable Value

110 540 $100.00 $105.00

111 1,010 63.00 55.00

112 450 84.00   80.00

113 220 178.50 189.00

120 430 215.00 218.00

121 a 1,800 17.00 1.00

122 330 252.00 247.00

a Part No. 121 is obsolete and has a realizable value of $1.00 each as scrap.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

Answer 1

Answer (a):

Inventory as of December 31, 2020 = $360,580

Working:

Part No. 110 111 112 113 120 121 Quantity Cost 540 $100.00 1010 $63.00 450 $84.00 220 $178.50 430 $215.00 1800 $17.00 330 $252.00 Per Unit Total cost Total NRV Net Realizable Value $105.00 $54,000.00 $56,700.00 $55.00 $63,630.00 $55,550.00 $80.00 $37,800.00 $36,000.00 $189.00 $39,270.00 $41,580.00 $218.00 $92,450.00 $93,740.00 $1.00 $30,600.00 $1,800.00 $247.00 $83,160.00 $81,510.00 Lower-of-cost-or- NRV $54,000.00 $55,550.00 $36,000.00 $39,270.00 $92,450.00 $1,800.00 $81,510.00 $360,580.00 Total

Answer (a):

Inventory as of December 31, 2020 = $366,880

Working:

Total cost Total NRV Lower-of-cost-or-NRV on Total inventory Part No. Quantity Cost 110 540 $100.00 1010 $63.00 112 450 $84.00 220 $178.50 120 430 $215.00 1800 $17.00 330 $252.00 Total Per Unit Net Realizable Value $105.00 $55.00 $80.00 $189.00 $218.00 $1.00 $247.00 $54,000.00 $56,700.00 $63,630.00 $55,550.00 $37,800.00 $36,000.00 $39,270.00 $41,580.00 $92,450.00 $93,740.00 $30,600.00 $1,800.00 $83,160.00 $81,510.00 $400,910.00 $366,880.00 122 $366,880.00