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 $ 5.50 $ 6.00 Saws Screwdrivers Paint products: 1-gallon cans Paint brushes 250 10.50 9.50 350 2.50 3.10 550 6.50 5.50 120 4.50 5.00 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 $ 5.50 $ 6.00 Saws Screwdrivers Paint products: 1-gallon cans Paint brushes 250 10.50 9.50 350 2.50 3.10 550 6.50 5.50 120 4.50 5.00 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

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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