A company has the following per unit original costs and replacement costs for its inventory. LCM is applied to individual items. Part A: 50 units with a cost of $5, and a replacement cost of $4.50. Part B: 75 units with a cost of $6, and a replacement cost of $6.50. Part C: 160 units with a cost of $3, and replacement cost of $2.50. Under the lower of cost or market method, the total value of this company's ending inventory is

A company has the following per unit original costs and replacement costs for its inventory. LCM is applied to individual items. Part A: 50 units with a cost of $5, and a replacement cost of $4.50. Part B: 75 units with a cost of $6, and a replacement cost of $6.50. Part C: 160 units with a cost of $3, and replacement cost of $2.50. Under the lower of cost or market method, the total value of this company's ending inventory is

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter8: Inventories: Special Valuation Issues

Section: Chapter Questions

Problem 2RE: Black Corporation uses the LIFO cost flow assumption. Each unit of its inventory has a net...

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A company has the following per unit original costs and market values for its inventory. Lower of cost or market is applied to individual items. Part A: 50 units with a cost of $5, and replacement cost of $4.50Part B: 75 units with a cost of $6, and replacement cost of $6.50Part C: 160 units with a cost of $3, and replacement cost of $2.50 Under the lower of cost or market method, the total value of this company's ending inventory is:
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Jenks Company developed the following information about its inventories in applying the lower-of-cost-or-net-realizabl e-value(LCNRV) basis in valuing inventories: Product Cost NRV A $114,000 $120,000 B 80,000 76,000 C 160,000 162,000 After Jenks applies the LCNRV rule, the value of the inventory reported on the balance sheet would be
Byron Company has five products in its inventory and uses the FIFO cost flow assumption. Specific data for each product are as follows: Estimated Cost of Disposal Product A B C D E Cost $90,000 110,000 60,000 100,000 105,000 B Selling Price $150,000 120,000 70,000 115,000 110,000 Required: 1. What is the correct inventory value, assu ing the LCNRV rule is applied to each item of inventory? Product Inventory Value A C D $20,000 15,000 5,000 5,000 8,000 E Total 2. What is the correct inventory value, assuming the LCNRV rule is applied to the total of inventory? losses relative to applying the rule to 3. Next Level Comment on any differences that result from applying the LCNRV nule to individual items compared to the total of inventory Applying the LCNRV rule to the total of inventory will result in The result occurs because the application of the LCNRV rule to groups of inventory allows price inventory valuations and the units