Current Attempt in Progress Swifty Company developed the following information about its inventories in applying the lower-of-cost-or-net realizable value (LCNRV) basis in valuing inventories: Net Product Cost Realizable Value A $126000 $129000 B 80000 72000 C 154000 155000 If Swifty applies the LCNRV basis, the value of the inventory reported on the balance sheet would be O $352000. O $360000. O $356000. O $364000.
Current Attempt in Progress Swifty Company developed the following information about its inventories in applying the lower-of-cost-or-net realizable value (LCNRV) basis in valuing inventories: Net Product Cost Realizable Value A $126000 $129000 B 80000 72000 C 154000 155000 If Swifty applies the LCNRV basis, the value of the inventory reported on the balance sheet would be O $352000. O $360000. O $356000. O $364000.
Survey of Accounting (Accounting I)
8th Edition
ISBN:9781305961883
Author:Carl Warren
Publisher:Carl Warren
Chapter12: Differential Analysis And Product Pricing
Section: Chapter Questions
Problem 12.16E: Product cost concept of product pricing Based on the data presented in Exercise 12-15, assume that...
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![### Current Attempt in Progress
Swifty Company developed the following information about its inventories in applying the lower-of-cost-or-net realizable value (LCNRV) basis in valuing inventories:
<div style="overflow-x:auto;">
<table>
<tr>
<th>Product</th>
<th>Cost</th>
<th>Net Realizable Value</th>
</tr>
<tr>
<td>A</td>
<td>$126,000</td>
<td>$129,000</td>
</tr>
<tr>
<td>B</td>
<td>$80,000</td>
<td>$72,000</td>
</tr>
<tr>
<td>C</td>
<td>$154,000</td>
<td>$155,000</td>
</tr>
</table>
</div>
From the table, it can be seen that each product has a specified cost and a net realizable value.
For product A, the cost ($126,000) is less than the net realizable value ($129,000).
For product B, the cost ($80,000) is higher than the net realizable value ($72,000).
For product C, the cost ($154,000) is lower than the net realizable value ($155,000).
---
If Swifty applies the LCNRV basis, the value of the inventory reported on the balance sheet would be:
- $352,000
- $360,000
- $356,000
- $364,000
To solve this, you need to choose the lowest value between the cost and the net realizable value for each product and sum them up.
- For product A, the lower value is $126,000.
- For product B, the lower value is $72,000.
- For product C, the lower value is $154,000.
Therefore, the total value to be reported on the balance sheet would be:
$126,000 + $72,000 + $154,000 = $352,000.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fe30699be-2882-4a27-acce-afcc593a9b43%2F625279c1-183c-4090-948a-a9af3c2a4ae6%2Ftt2beop_processed.png&w=3840&q=75)
Transcribed Image Text:### Current Attempt in Progress
Swifty Company developed the following information about its inventories in applying the lower-of-cost-or-net realizable value (LCNRV) basis in valuing inventories:
<div style="overflow-x:auto;">
<table>
<tr>
<th>Product</th>
<th>Cost</th>
<th>Net Realizable Value</th>
</tr>
<tr>
<td>A</td>
<td>$126,000</td>
<td>$129,000</td>
</tr>
<tr>
<td>B</td>
<td>$80,000</td>
<td>$72,000</td>
</tr>
<tr>
<td>C</td>
<td>$154,000</td>
<td>$155,000</td>
</tr>
</table>
</div>
From the table, it can be seen that each product has a specified cost and a net realizable value.
For product A, the cost ($126,000) is less than the net realizable value ($129,000).
For product B, the cost ($80,000) is higher than the net realizable value ($72,000).
For product C, the cost ($154,000) is lower than the net realizable value ($155,000).
---
If Swifty applies the LCNRV basis, the value of the inventory reported on the balance sheet would be:
- $352,000
- $360,000
- $356,000
- $364,000
To solve this, you need to choose the lowest value between the cost and the net realizable value for each product and sum them up.
- For product A, the lower value is $126,000.
- For product B, the lower value is $72,000.
- For product C, the lower value is $154,000.
Therefore, the total value to be reported on the balance sheet would be:
$126,000 + $72,000 + $154,000 = $352,000.
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