Question

Almaden Hardware Store sells two product categories, tools and paint products. Information pertaining to its 2021 year-end inventory is as follows:

Net Per Unit Cost Realizable Inventory, by Product Category Quantity Value Tools $ 5.80 $6.30 Hammers 120 Saws 280 10.80 9.80 Screwdrivers 2.80 380 3.40 Paint products: 1-gallon cans Paint brushes 580 6.80 5.80 5.30 120 4.80 Required: 1. Determine the carrying value of inventory at year-end, assuming the lower of cost or net realizable value (LCNRV) rule is applied to (a) individual products, (b) product categories, and (c) total inventory.

Answer 1

			Lower of cost and NRV
		Net Realizable Value	By Individual Products	By Product Categories	By Total Inventory
Product	Cost
Tools:
Hammers	$        696	$                           756	$                            696	$                            696	$                             756
Saws	$    3,024	$                       2,744	$                        2,744	$                        3,024	$                         2,744
Screwdrivers	$    1,064	$                       1,292	$                        1,064	$                        1,064	$                         1,292
Total Tools	$    4,784	$                       4,792	$                        4,504	$                        4,784	$                         4,792
Paint products:
1-gallon cans	$    3,944	$                       3,364	$                        3,364	$                        3,364	$                         3,364
Paint brushes	$        576	$                           636	$                            576	$                            636	$                             636
Total Paint	$    4,520	$                       4,000	$                        3,940	$                        4,000	$                         4,000
Total	$    9,304	$                       8,792	$                        8,444	$                        8,784	$                         8,792

This is the breakup.

Here is the answer

			Lower of cost and NRV
		Net Realizable Value	By Individual Products	By Product Categories	By Total Inventory
Product	Cost
Tools:
Hammers	$        696	$                           756	$                            696
Saws	$    3,024	$                       2,744	$                        2,744
Screwdrivers	$    1,064	$                       1,292	$                        1,064
Total Tools	$    4,784	$                       4,792	$                        4,504	$                        4,784
Paint products:
1-gallon cans	$    3,944	$                       3,364	$                        3,364
Paint brushes	$        576	$                           636	$                            576
Total Paint	$    4,520	$                       4,000	$                        3,940	$                        4,000
Total	$    9,304	$                       8,792	$                        8,444	$                        8,784	$                         8,792