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.
College Accounting (Book Only): A Career Approach
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ISBN:9781337280570
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ChapterC: Inventory Methods
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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
Saws
Screwdrivers
Paint products:
1-gallon cans
Paint brushes
120
$ 5.50
$ 6.00
250
350
10.50
2.50
9.50
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.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff22793e2-53a1-40a6-afa4-d548d3755830%2F9870b2e1-a4bb-4485-b396-7591133c720e%2Fy462r27_processed.jpeg&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:
Inventory, by Product Category
Quantity
Per Unit
Cost
Net Realizable
Value
Tools:
Hammers
Saws
Screwdrivers
Paint products:
1-gallon cans
Paint brushes
120
$ 5.50
$ 6.00
250
350
10.50
2.50
9.50
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.
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