Question

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The inventory of Flint Company on December 31, 2017, consists of the following items.

Part			Quantity		Cost per Unit		Net Realizable Value
110			600		$98		$103
111			920		62		54
112			490		82		78
113			220		175		185
120			360		211		214
121	a		1,500		16		1
122			320		247		242

^a Part No. 121 is obsolete and has a realizable value of $1 each as scrap.

(a) Determine the inventory as of December 31, 2017, by the LCNRV method, applying this method to each item.

Inventory as of December 31, 2017

$ (b) Determine the inventory by the LCNRV method, applying the method to the total of the inventory. Inventory as of December 31, 2017 $

Answer 1

Answer-a)- Inventory as of December 31,2020, by the LCNRV method to each item = $340100.

Explanation-

Calculation of closing inventory as of December 31,2017 for each item
By using Lower of cost or Net Realizable Value Method						Closing Inventory
Part	Quantity (a)	Cost per unit	Net Realizable value	Valued on	$ Per unit (b)	Amount $ (C=a*b)
		$	$
110	600	98	103	Cost	98	58800
111	920	62	54	Net Realizable value	54	49680
112	490	82	78	Net Realizable value	78	38220
113	220	175	185	Cost	175	38500
120	360	211	214	Cost	211	75960
121a	1500	16	1	Net Realizable value	1	1500
122	320	247	242	Net Realizable value	242	77440
					Totals	340100

b)- Inventory as of December 31,2020, by the LCNRV method to the total of the inventory = $346380.

Explanation-

Calculation of closing inventory as of December 31,2017 to total of the Inventory
By using Lower of cost or Net Realizable Value Method
Part	Quantity (a)	Cost per unit (b)	Net Realizable value (c)	Total cost( d=a*b)	Total NRV (e=a*c)
		$	$	$	$
110	600	98	103	58800	61800
111	920	62	54	57040	49680
112	490	82	78	40180	38220
113	220	175	185	38500	40700
120	360	211	214	75960	77040
121a	1500	16	1	24000	1500
122	320	247	242	79040	77440
			Totals	373520	346380