Question

Exercise 9-2 Ivanhoe Company uses the LCNRV method, on an individual-item basis, in pricing its inventory items. The inv...

Exercise 9-2

Ivanhoe 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 $144 $132 $114 $108 $132 $108
Cost 90 96 96 96 60 43
Cost to complete 36 36 30 42 36 36
Selling costs 12 22 12 24 12 24


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 $

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Answer #1
Estimated selling price Cost to complete Selling costs NRV Cost LCNRV
Item D 144 36 12 96 90 90
Item E 132 36 22 74 96 74
Item F 114 30 12 72 96 72
Item G 108 42 24 42 96 42
Item H 132 36 12 84 60 60
Item I 108 36 24 48 43 43
Note: NRV = Estimated selling price-Cost to complete-Selling costs
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