14. Decker Company has five products in its inventory. Information about the December 31, 2021, inventory follows. Product Quantity Unit Cost Unit Selling Price A 1,200 $ 14 $ 20 B 1,000 19 22 C 800 5 10 D 400 9 8 E 800 18 17 The cost to sell for each product consists of a 10 percent sales commission. Required: 1. Determine the carrying value of inventory at December 31, 2021, assuming the lower of cost or net realizable value (LCNRV) rule is applied to individual products. 2. Determine the carrying value of inventory at December 31, 2021, assuming the LCNRV rule is applied to the entire inventory. 3. Assuming inventory write-downs are common for Decker, record any necessary year-end adjusting entry based on the amount calculated in requirement 2.
14. Decker Company has five products in its inventory. Information about the December 31, 2021, inventory follows. Product Quantity Unit Cost Unit Selling Price A 1,200 $ 14 $ 20 B 1,000 19 22 C 800 5 10 D 400 9 8 E 800 18 17 The cost to sell for each product consists of a 10 percent sales commission. Required: 1. Determine the carrying value of inventory at December 31, 2021, assuming the lower of cost or net realizable value (LCNRV) rule is applied to individual products. 2. Determine the carrying value of inventory at December 31, 2021, assuming the LCNRV rule is applied to the entire inventory. 3. Assuming inventory write-downs are common for Decker, record any necessary year-end adjusting entry based on the amount calculated in requirement 2.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
14. Decker Company has five products in its inventory. Information about the December 31, 2021, inventory follows.
| Product | Quantity | Unit Cost |
Unit Selling Price |
|||||||
| A | 1,200 | $ | 14 | $ | 20 | |||||
| B | 1,000 | 19 | 22 | |||||||
| C | 800 | 5 | 10 | |||||||
| D | 400 | 9 | 8 | |||||||
| E | 800 | 18 | 17 | |||||||
The cost to sell for each product consists of a 10 percent sales commission.
Required:
1. Determine the carrying value of inventory at December 31, 2021, assuming the lower of cost or net realizable value (LCNRV) rule is applied to individual products.
2. Determine the carrying value of inventory at December 31, 2021, assuming the LCNRV rule is applied to the entire inventory.
3. Assuming inventory write-downs are common for Decker, record any necessary year-end
Transcribed Image Text:1
Record any necessary year-end adjusting entry assuming that inventory write-
downs are common for Decker Company.
Note: Enter debits before credits.
Transaction
General Journal
Debit
Credit
1
Record entry
Clear entry
View general journal
Transcribed Image Text:Required 1
Required 2
Required 3
Determine the carrying value of inventory at December 31, 2021, assuming the lower of cost or net realizable value (LCNRV)
rule is applied to individual products. (Do not round intermediate calculations.)
Inventory
Value
Product
Units
Cost
NRV
A
1,200
1,000
800
D
400
E
800
< Required 1
Required 2 >
B.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 3 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education