Question

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1,800 17.00 1.00 290 256.80 251.00 490 113 122 a Part No. 121 is obsolete and has a realizable value of $1.00 each as scrap.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 this method to each item. Inventory as of December 31, 2020 (b) Determine the inventory by the LCNRV method, applying the method to the total of the inventory. Inventory as of December 31, 2020

Answer 1

Answer-a)- Inventory as of December 31,2020 by the LCNRV method, applying this method to each item = $369559.

Explanation-

Calculation of closing inventory as of December31,2020 for each item
By using Lower of cost or Net Realizable Vaue Method	Closing Inventory
Part	Quantity (a)	Cost per unit	Net Reliazable value	Valued on	$ Per unit (b)	Amount $ (C=a*b)
		$	$
110	650	102.00	107.00	Cost	102.00	66300
111	1050	64.20	56.00	Net Realizable value	56.00	58800
112	490	85.60	81.00	Net Realizable value	81.00	39690
113	210	181.90	192.60	Cost	181.90	38199
120	420	219.00	223.00	Cost	219.00	91980
121*	1800	17.00	1.00	Net Realizable value	1.00	1800
122	290	256.80	251.00	Net Realizable value	251.00	72790
Total						369559

b)- Inventory as of December 31,2020 by the LCNRV method, applying the method to the total of the inventory = $490294.

Explanation-

Calculation of closing inventory as of December31,2020 to total of the Inventory
By using Lower of cost or Net Realizable Vaue Method
Part	Quantity (a)	Cost per unit (b)	Net Reliazable value (c)	Total cost( d=a*b)	Total NRV (e=a*c)
		$	$
110	650	102.00	107.00	66300	69550
111	1050	64.20	56.00	67410	58800
112	490	85.60	81.00	41944	39690
113	210	181.90	192.60	38199	40446
120	420	219.00	223.00	91980	93660
121a	1800	17.00	1.00	30600	1800
122	290	256.80	251.00	74472	72790
			Totals	530025	490294