Below is a statement of inventory for a candle shop, given on May 31. a) Calculate the lower of cost or net realizable value for the inventory, applied separately to each product, and by inventory group. Cost NRV LCNRV applied to Product Quantity Per Unit Total for Per Unit Total for product product Items Group Blue Scented Candles 29 9.30 9.50 Red Votive Candles Red Unscented Candles 28 7.75 8.20 23 8.30 7.40 Green Votive Candles 24 6.35 Purple Scented Candles Totals 24 9.35 10.15 b) Prepare any required adjusting entry assuming LCNRV is applied to each item. Dates must be entered in the format dd/mmm (15/Jan) Leave the entry blank if no adjusting entry is required. Page GJ8 Credit General Journal Date Account/Explanation F Debit

Below is a statement of inventory for a candle shop, given on May 31. a) Calculate the lower of cost or net realizable value for the inventory, applied separately to each product, and by inventory group. Cost NRV LCNRV applied to Product Quantity Per Unit Total for Per Unit Total for product product Items Group Blue Scented Candles 29 9.30 9.50 Red Votive Candles Red Unscented Candles 28 7.75 8.20 23 8.30 7.40 Green Votive Candles 24 6.35 Purple Scented Candles Totals 24 9.35 10.15 b) Prepare any required adjusting entry assuming LCNRV is applied to each item. Dates must be entered in the format dd/mmm (15/Jan) Leave the entry blank if no adjusting entry is required. Page GJ8 Credit General Journal Date Account/Explanation F Debit

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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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Concept explainers

Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.

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Question

Ccid%3D11210
Below is a statement of inventory for a candle shop, given on May 31.
a) Calculate the lower of cost or net realizable value for the inventory, applied separately to each product, and by inventory group.
Cost
Product
Per Unit
NRV
LCNRV applied to
Total for
product
Quantity
Per Unit
Total for
Items
Group
Blue Scented Candles
Red Votive Candles
product
29
9.30
9.50
28
7.75
8.20
Red Unscented Candles
23
8.30
7.40
Green Votive Candles
24
7
6.35
Purple Scented Candles
Totals
24
9.35
10.15
b) Prepare any required adjusting entry assuming LCNRV is applied to each item. Dates must be entered in the format dd/mmm (15/Jan). Leave the entry blank if no adjusting
entry is required.
General Journal
Page GJ8
Date
Account/Explanation
F Debit
Credit
C) Prepare any required adjusting entry assuming LCNRV is applied to the whole group. Dates must be entered in the format dd/mmm (15/Jan). Leave the entry blank if no
adjusting entry is required.
Page GJ8
Credit
General Journal
F Debit
Date
Account/Explanation

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