The inventory of Ohio Company on December 31, 2017, consists of the following items
Part |
Quantity |
Cost per unit |
Net Realizable Value per unit |
110 |
600 |
$95 |
$100 |
111 |
1,000 |
60 |
52 |
112 |
500 |
80 |
76 |
113 |
200 |
170 |
180 |
120 |
400 |
205 |
208 |
121 |
1,600 |
16 |
1 |
122 |
300 |
240 |
235 |
Part No. 121 is obsolete and as a result has a realizable value of $1 each as scrap.
*GAAP require that inventory be valued at the lesser amount of its laid-down cost and the amount for which it can likely be sold—its net realizable value(NRV). This concept is known as the lower of cost and Net realizable value, (LCNRV).
a*
Part | Quantity | Cost per unit | NRV per unit | LCNRV | LCNRV-unit basis |
110 | 600 | $ 95 | $ 100 | $ 95 | $ 57,000 |
111 | 1000 | $ 60 | $ 52 | $ 52 | $ 52,000 |
112 | 500 | $ 80 | $ 76 | $ 76 | $ 38,000 |
113 | 200 | $ 170 | $ 180 | $ 170 | $ 34,000 |
120 | 400 | $ 205 | $ 208 | $ 205 | $ 82,000 |
121 | 1600 | $ 16 | $ 1 | $ 1 | $ 1,600 |
122 | 300 | $ 240 | $ 235 | $ 235 | $ 70,500 |
$ 335,100 |
Ending Inventory under LCNRV method-Each item, $335,100.
---------------------------------------------------------------------------------------------------------------------------------------
b.
Part | Quantity | Cost per unit | NRV per unit | Cost-Group Wise | NRV-Group Wise |
110 | 600 | $ 95 | $ 100 | $ 57,000 | $ 60,000 |
111 | 1000 | $ 60 | $ 52 | $ 60,000 | $ 52,000 |
112 | 500 | $ 80 | $ 76 | $ 40,000 | $ 38,000 |
113 | 200 | $ 170 | $ 180 | $ 34,000 | $ 36,000 |
120 | 400 | $ 205 | $ 208 | $ 82,000 | $ 83,200 |
121 | 1600 | $ 16 | $ 1 | $ 25,600 | $ 1,600 |
122 | 300 | $ 240 | $ 235 | $ 72,000 | $ 70,500 |
$ 370,600 | $ 341,300 |
W.e. is lower, Then, $341,300
Ending Inventory under LCNRV method-Group item, $341,300.
----------------------------------------------------------------------------------------------------------------------------------
c.
Account Info | Debit | Credit |
Cost of goods sold | 6200 | |
Merchandise Inventory | 6200 | |
(To adjsut inventory to LCNRV)[$3,35,100-3,41,300] |
----------------------------------------------------------------------------------------------------------------------
If you have any doubts, drop your messages in the comment box!
Thank you!!! ALL THE BEST!!!!
Please rate this answer, If you like the answer, kindly raise your
THUMBS-UP button.
#STAY SAFE
The inventory of Ohio Company on December 31, 2017, consists of the following items Part Quantity...
The inventory of Cullumber Company on December 31, 2017, consists of the following items. Part Quantity Cost per Unit Net Realizable Value 110 640 $126 $133 111 1,100 80 69 112 450 106 101 113 190 226 239 120 410 273 277 121 a 1,700 21 1 122 320 319 313 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,...
Exercise 9-1 The inventory of Skysong Company on December 31, 2017, consists of the following items. Part Quantity Cost per Unit Net Realizable Value 110 620 $121 $127 111 1,080 76 66 112 540 102 97 113 220 216 229 120 440 260 264 121 a 1,400 20 1 122 330 305 298 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...
The inventory of Sheridan Company on December 31, 2020, consists of the following items. Part Quantity Cost per Unit Net Realizable Value 110 600 $107.00 $113.00 111 1,000 67.80 59.00 112 500 90.40 86.00 113 210 192.10 203.40 120 410 232.00 235.00 121 a 1,600 18.00 1.00 122 270 271.20 266.00 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,...
The inventory of Blue Company on December 31, 2020, consists of the following items. Part Quantity Cost per Unit Net Realizable Value 110 610 $136.00 $143.00 111 85.80 74.00 920 460 112 114.40 109.00 113 210 257.40 243.10 293.00 410 297.00 121 a 1,500 23.00 1.00 122 320 343.20 336.00 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...
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,...
The inventory of Marigold Company on December 31, 2020, consists of the following items. Part Quantity Cost per Unit Net Realizable Value 110 650 $102.00 $107.00 111 1,050 64.20 56.00 112 85.60 81.00 210 181.90 192.60 120 420 219.00 223.00 121a 1,800 17.00 1.00 290 256.80 251.00 490 113 122 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...
Exercise 9-1 The inventory of Windsor Company on December 31, 2017, consists of the following items. Part Quantity Cost per Unit Net Realizable Value 110 620 $117 $123 111 920 74 112 530 98 93 113 190 209 120 370 256 121a 1,700 122 330 295 289 221 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...
our answer is incorrect. Try again. 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...
The inventory of Oriole Company on December 31, 2020, consists of the following items. Part 110 111 112 113 120 121a 122 Quantity 630 1,000 510 200 400 1,600 300 Cost per Unit $132.00 83.40 111.20 236.30 285.00 22.00 333.60 Net Realizable Value $139.00 72.00 106.00 250.20 289.00 1.00 327.00 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...
Exercise 9-01 The inventory of Blossom Company on December 31, 2020, consists of the following items. Quantity Cost per Unit $138.00 87.00 Net Realizable Value Part 110 660 $145.00 111 1,030 520 75.00 112 116.00 110.00 113 180 246.50 261.00 120 370 297.00 302.00 23.00 121a 1,700 320 1.00 122 348.00 341.00 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...