Question

Exercise 9-2

Flounder Company uses the LCNRV method, on an individual-item basis, in pricing its inventory items. The inventory at December 31, 2017, consists of products D, E, F, G, H, and I. Relevant per unit data for these products appear below.

		Item D			Item E			Item F			Item G			Item H			Item I
Estimated selling price		$140			$129			$111			$105			$129			$105
Cost		88			94			94			94			59			42
Cost to complete		35			35			29			41			35			35
Selling costs		12			21			12			23			12			23

Using the LCNRV rule, determine the proper unit value for balance sheet reporting purposes at December 31, 2017, for each of the inventory items above.

Item D			$
Item E			$
Item F			$
Item G			$
Item H			$
Item I			$

Answer 1

Col I	Col II	Col III	Col IV	Col V	Col VI	Col VII
Item No.	Estimated Selling price	Cost to complete and sell	Selling Costs	NRV(Col II - Col III - Col IV)	Cost	Lower of cost and NRV
Item D	$140.00	$35.00	$12.00	$93.00	$88.00	$88
Item E	$129.00	$35.00	$21.00	$73.00	$94.00	$73
Item F	$111.00	$29.00	$12.00	$70.00	$94.00	$70
Item G	$105.00	$41.00	$23.00	$41.00	$94.00	$41
Item H	$129.00	$35.00	$12.00	$82.00	$59.00	$59
Item I	$105.00	$35.00	$23.00	$47.00	$42.00	$42