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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: 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.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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
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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