Ace Hardware Store sells two product categories, tools and paint products. Information pertaining to its year-end Inventory is as follows: Inventory, by Product Category Quantity Per Unit Cost Net Realizable Value Tools: Hammers 120 $ 4.00 $ 4.50 Saws Screwdrivers Paint products: 1-gallon cans 100 9.00 8.00 200 1.00 1.60 400 5.00 4.00 120 3.00 3.50 Paint brushes Required: 1. Determine the carrying value of Inventory at year-end, assuming the lower of cost or net realizable value (LCNRV) rule is applied to (a) Individual products, (b) product categories, and (c) total Inventory. 2. Assuming Inventory write-downs are common for Ace, record any necessary year-end adjusting entry for each of the LCNRV applications in requirement 1.
Ace Hardware Store sells two product categories, tools and paint products. Information pertaining to its year-end Inventory is as follows: Inventory, by Product Category Quantity Per Unit Cost Net Realizable Value Tools: Hammers 120 $ 4.00 $ 4.50 Saws Screwdrivers Paint products: 1-gallon cans 100 9.00 8.00 200 1.00 1.60 400 5.00 4.00 120 3.00 3.50 Paint brushes Required: 1. Determine the carrying value of Inventory at year-end, assuming the lower of cost or net realizable value (LCNRV) rule is applied to (a) Individual products, (b) product categories, and (c) total Inventory. 2. Assuming Inventory write-downs are common for Ace, record any necessary year-end adjusting entry for each of the LCNRV applications in requirement 1.
College Accounting, Chapters 1-27
23rd Edition
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:HEINTZ, James A.
Chapter27: Adjustments, Financial Statements, And Year-end Accounting For A Manufacturing
business
Section: Chapter Questions
Problem 1MP: Reese Manufacturing Company manufactures and sells a limited line of products made to customer...
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![Ace Hardware Store sells two product categories, tools and paint products. Information pertaining to its year-end
Inventory is as follows:
Per Unit Net Realizable
Inventory, by Product category
Quantity
Cost
Value
Tools:
Hammers
120
$ 4.00
$ 4.50
Saws
Screwdrivers
Paint products:
1-gallon cans
100
9.00
8.00
200
1.00
1.60
400
5.00
4.00
120
3.00
3.50
Paint brushes
Required:
1. Determine the carrying value of inventory at year-end, assuming the lower of cost or net realizable value
(LCNRV) rule is applied to (a) Individual products, (b) product categories, and (c) total Inventory.
2. Assuming Inventory write-downs are common for Ace, record any necessary year-end adjusting entry for each
of the LCNRV applications in requirement 1.
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Determine the carrying value of inventory at year-end, assuming the lower of cost or net realizable value (LCNRV) rule is
applied to (a) individual products, (b) product categories, and (c) total inventory.
Product
Lower of cost and NRV
Cost
Net Realizable
Value
By Individual
Products
By Product
Categories
By Total
Inventory
Tools:
Hammers
$
4
Saws
9
Screwdrivers
1
Total tools
$
14
$
0
Paint products:
1-gallon cans
S
6
Paint brushes
4
Total paint
S
10
$
0
Total
$
24
$
0
$
0
$
Required ?
0](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F6d101070-2823-4368-b79f-fbcb5991840c%2F491ef5b5-d79f-4da9-823e-70b4d5cdb2df%2Fgj8ok79_processed.png&w=3840&q=75)
Transcribed Image Text:Ace Hardware Store sells two product categories, tools and paint products. Information pertaining to its year-end
Inventory is as follows:
Per Unit Net Realizable
Inventory, by Product category
Quantity
Cost
Value
Tools:
Hammers
120
$ 4.00
$ 4.50
Saws
Screwdrivers
Paint products:
1-gallon cans
100
9.00
8.00
200
1.00
1.60
400
5.00
4.00
120
3.00
3.50
Paint brushes
Required:
1. Determine the carrying value of inventory at year-end, assuming the lower of cost or net realizable value
(LCNRV) rule is applied to (a) Individual products, (b) product categories, and (c) total Inventory.
2. Assuming Inventory write-downs are common for Ace, record any necessary year-end adjusting entry for each
of the LCNRV applications in requirement 1.
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Determine the carrying value of inventory at year-end, assuming the lower of cost or net realizable value (LCNRV) rule is
applied to (a) individual products, (b) product categories, and (c) total inventory.
Product
Lower of cost and NRV
Cost
Net Realizable
Value
By Individual
Products
By Product
Categories
By Total
Inventory
Tools:
Hammers
$
4
Saws
9
Screwdrivers
1
Total tools
$
14
$
0
Paint products:
1-gallon cans
S
6
Paint brushes
4
Total paint
S
10
$
0
Total
$
24
$
0
$
0
$
Required ?
0
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