Gatekeeper Company has two products with cost and selling prices as follows: Product X Product Y Selling price Estimated selling cost 2,000,000 3,000,000 600,000 700,000 Materials and conversion 1,500,000 1,800,000 cost General administration cost 300,000 800,000 At year-end, the manufacture of inventory has been completed but no selling cost has been incurred. Question 1: Under the LCNRV by individual item, the inventory shall be measured at what amount? Question 2: Under the LCNRV by total, the inventory shall be measured at what amount?

Gatekeeper Company has two products with cost and selling prices as follows: Product X Product Y Selling price Estimated selling cost 2,000,000 3,000,000 600,000 700,000 Materials and conversion 1,500,000 1,800,000 cost General administration cost 300,000 800,000 At year-end, the manufacture of inventory has been completed but no selling cost has been incurred. Question 1: Under the LCNRV by individual item, the inventory shall be measured at what amount? Question 2: Under the LCNRV by total, the inventory shall be measured at what amount?

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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there are two parts to one question. thank you so much!
Forest Company has five products in its inventory. Information about ending inventory follows. Product Quantity Unit Cost A 1,000 B 800 с 600 D 200 E 600 $ 10 15 3 7 14 Unit Replacement Unit Selling Cost Price $ 16 18 8 6 13 $ 12 11 2 4 12 The cost to sell for each product consists of a 15 percent sales commission. The normal profit for each product is 40 percent of the selling price. Required: 1. Determine the carrying value of ending inventory, assuming the lower of cost or market (LCM) rule is applied to individual products. 2. Determine the carrying value of inventory, assuming the LCM rule is applied to the entire inventory. 3. Assuming inventory write-downs are common for Forest, record any necessary year-end adjusting entry based on the amount calculated in requirement 2.
Crane Ltd. had the following items in inventory as at December 31, 2024: Item No. Quantity Unit Cost NRV དྷྭ སྒྲ སཱུ སྦ 340 $4.00 $4.30 370 3.00 2.90 380 8.00 9.00 400 7.00 6.80 Assume that Crane uses a perpetual inventory system. Fill in the table below for the lower of cost and net realizable value per unit, the inventory dollar amount at the lower of cost and net realizable value, and the dollar amount of the inventory at cost. ntity Unit Cost NRV Unit LC & NRV 340 $4.00 $4.30 S 370 3.00 2.90 Dollar LC & NRV 4.00 $ 2.90 1360 1073 380 8.00 9.00 8.00 3040 400 7.00 6.80 6.80 2720 Dollar Cost 1360 1110 3040 2800 $ 8193 $ 8310 Prepare any necessary adjusting entry at December 31, 2024. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List debit entry before credit entry) Account Titles Debit Credit
Jenks Company developed the following information about its inventories in applying the lower-of-cost-or-net-realizabl e-value(LCNRV) basis in valuing inventories: Product Cost NRV A $114,000 $120,000 B 80,000 76,000 C 160,000 162,000 After Jenks applies the LCNRV rule, the value of the inventory reported on the balance sheet would be
Windsor Co. follows the practice of valuing its inventory at the lower-of-cost-or-market. The following information is available from the company's inventory records as of December 31, 2025. Replacement Item Quantity Unit Cost Cost/Unit Estimated Selling Price/Unit Completion & Disposal Cost/Unit Normal Profit Margin/Unit A 1,400 $8.85 $9.91 $12.39 $1.77 $2.12 B 1,100 9.68 9.32 11.09 1.06 1.42 C 1,300 6.61 6.37 8.50 1.36 0.71 D 1,300 4.48 4.96 7.43 0.94 1.77 1,700 7.55 7.43 7.91 0.83 1.18 Greg Forda is an accounting clerk in the accounting department of Windsor Co., and he cannot understand why the market value keeps changing from replacement cost to net realizable value to something that he cannot even figure out. Greg is very confused, and he is the one who records inventory purchases and calculates ending inventory. You are the manager of the department and an accountant.
The inventory of Royal Decking consisted of five products. Information about ending inventory is as follows: Product A B C D E Product A Costs to sell consist of a sales commission equal to 10% of selling price and shipping costs equal to 5% of cost. Required: What unit value should Royal Decking use for each of its products when applying the lower of cost or net realizable value (LCNRV) rule to units of ending inventory? BUDE Cost $ 180 220 160 140 90 C Per Unit Selling Price $ 200 240 220 240 125 Cost NRV Per Unit Inventory Value
Suppose that Ivanhoe Depot developed the following information about its inventories in applying the lower-of-cost-or-net- realizable-value (LCNRV) basis in valuing inventories: Product A B C Cost $119000 83000 166000 NRV $125000 79000 168000 After Ivanhoe Depot applies the LCNRV rule, the value of the inventory reported on the balance sheet will be $368000. O $364000. O $372000. O $376000.
Sanchez Company was formed on January 1 of the current year and is preparing the annual financial statements dated December 31, current year. Ending inventory information about the four major items stocked for regular sale follows: Item ABUD A ENDING INVENTORY, CURRENT YEAR Quantity Unit Cost When on Hand Acquired (FIF0) Required: 1. Compute the valuation that should be used for the current year ending inventory using lower of cost or net realizable value applied on an item-by-item basis. 2. What will be the effect of the write-down of inventory to lower of cost or net realizable value on cost of goods sold for the year ended December 31, current year? Complete this question by entering your answers in the tabs below. Total Net tem Quantity Total Cost Realizable Value D Required 1 Required 2 Compute the valuation that should be used for the current year ending inventory using lower of cost or net realizable value applied on an item-by-item basis. C D 31 31 66 46 21 $16 45 56 33 66 DE $…