Question

H.T. Tan Company is preparing the annual financial statements dated December 31 of the current year. Ending inventory information about the five major items stocked for regular sale follows: Quantity on Hand ENDING INVENTORY, CURRENT YEAR Net Realizable Unit Cost When Value (Market) Acquired (FIFO) at Year-End $ 23 $ 20 48 Item 58 60 18 78 358 LO Required: Compute the valuation that should be used for the current year ending inventory using lower of cost or net realizable value applied on an item-by-item basis. Item Total Net Quantity Total Cost Realizable Value Lower of Cost or NRV 18 78 358 Total E $ 0 $ 0 $ 0

Answer 1

As per Chegg policy only one question should be posted and answered at a time. Please upload other questions seperately. Below answering the very first question:

Item	Quantity	Total Cost	Total NRV	Lower of Cost or NRV
A	58	$    1,334	$    1,160	$                 1,160
B	88	$    3,344	$    4,224	$                 3,344
C	18	$    1,008	$    1,080	$                 1,008
D	78	$    2,574	$    2,964	$                 2,574
E	358	$    6,444	$    4,654	$                 4,654
Total Inventory Value		$ 14,704	$ 14,082	$              12,740
Workings:
		Per unit	Total
Item	Quantity	Cost	NRV	Cost	NRV	Lower of Cost or Market
	(a)	(i)	(ii)	(iii) = (a)*(i)	(iv) = (a)*(ii)	Lower of (iii) or (iv)
A	58	$          23	$          20	$                 1,334	$           1,160	$            1,160
B	88	$          38	$          48	$                 3,344	$           4,224	$            3,344
C	18	$          56	$          60	$                 1,008	$           1,080	$            1,008
D	78	$          33	$          38	$                 2,574	$           2,964	$            2,574
E	358	$          18	$          13	$                 6,444	$           4,654	$            4,654
Total Inventory Value				$              14,704	$        14,082	$          12,740