Question

The following information concerns several of the inventory items at DC's. Net Realizable Value Quantity Unit Cost 80 Description Department A: Model XP 235 Model XP 376 Model XP 522 Department B: Model ZY 114 Model ZY 232 Model ZY 183 105 90 $24.40 28.25 21.50 $23.10 26.50 22.85 76.50 101.50 146.50 76.50 97.50 143.80 1. Determine the amount of inventory to be reported on the financial statements using the lower of cost or net realizable value method of valuation under lower of cost or net realizable value for each item separately. 2. Determine the amount of inventory to be reported on the financial statements using the lower of cost or net realizable value method of valuation under lower of total cost or total net realizable value. 3. Determine the amount of inventory to be reported on the financial statements using the lower of cost or net realizable value method of valuation under lower of total cost or total net realizable value by department (Round your answer to 2 decimal places.) Inventory valuation

Answer 1

Answer:

Inventory valuation 21314 Note-1 21434 Note-2 21434 Note-3 / 37

Note-1 NRV per Cost per Item No. Quantity Total Cost Total NRV Lower of cost or NRV unit unit (1) (7) $ $ Model XP 235 Model XP 376 Model XP 522 Model ZY 114 Model ZY 232 Model ZY 183 (2) (3) (4) =(2) (3) 80 $ 24.40 $ 1,952 105 28.25 2,966 21.50 1,935 76.50 3,443 101.50 5,481 42 146.50 6,153 (5) 23.10 26.50 22.85 76.50 97.50 143.80 (6) =(2) > (5) $ 1,848 2,783 2,057 3,443 5,265 6,040 Total 1,848 2,783 1,935 3,443 5,265 6,040 21,314

Note-2 Item No. (1) Model XP 235 Model XP 376 Model XP 522 Model ZY 114 Model ZY 232 Model ZY 183 Cost per Quantity Total Cost 1 unit (2) (3) (4) =(2) (3) 80 $ 24.40 $ 1,952 105 28.25 2,966 90 21.50 1,935 76.50 3,443 101.50 5,481 42 146.50 6,153 Total $ 21,930 NRV per Total unit NRV (5) (6) =(2) > (5) $ 23.10 $ 1,848 26.50 2,783 22.85 2,057 76.50 3,443 97.50 5,265 143.80 6,040 Total $ 21,434 Lower of total cost or total NRV is $21,434

Note-3 Total Quantity (2) Cost per unit (3) Total Cost (4) =(2) (3) NRV per unit (5) NRV (6) =(2) > (5) Item No. (1) Department A: Model XP 235 Model XP 376 Model XP 522 $ 80 $ 24.40 $ 1,952 105 28.25 2,966 90 21.501,935 Total 6,853 23.10 $ 26.501 22.85 Total 1,848 2,783 2,057 6,687 Department B: Model ZY 114 Model ZY 232 Model ZY 183 45 54 42 76.50 101.50 146.50 Total 3,443 5,481 6,153 15,077 76.50 97.50 143.80 Total 3,443 5,265 6,040 14,747

$ Lower of total cost or total NRV for Dept. A= Lower of total cost or total NRV for Dept. B = Total 6,687 14,747 21,434