Lower of Cost or Net Realizable Value (LCNRV) Rule Determine the proper total inventory value for each of the following items in Erik Company's ending inventory: a. Erik has 400 rolls of camera film that have become obsolete with the advent of digital cameras. The films cost $3.30 each and are normally sold for $6.60. To clear out these old films, Erik will drop their selling price to $1.98. There are no related selling costs. b. Erik has four cameras in stock that have been used as demonstration models. The cameras cost $760 and normally sell for $960. Because these cameras are in used condition, Erik has set the selling price at $720 each. Expected selling costs are $20 per camera. New models of the camera, already on order, will cost Erik $800 and will sell for $1,040. Final inventory value a. $ b. $ o o

Lower of Cost or Net Realizable Value (LCNRV) Rule Determine the proper total inventory value for each of the following items in Erik Company's ending inventory: a. Erik has 400 rolls of camera film that have become obsolete with the advent of digital cameras. The films cost $3.30 each and are normally sold for $6.60. To clear out these old films, Erik will drop their selling price to $1.98. There are no related selling costs. b. Erik has four cameras in stock that have been used as demonstration models. The cameras cost $760 and normally sell for $960. Because these cameras are in used condition, Erik has set the selling price at $720 each. Expected selling costs are $20 per camera. New models of the camera, already on order, will cost Erik $800 and will sell for $1,040. Final inventory value a. $ b. $ o o

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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1.) ABC Inc. has the following information related to an item in its ending inventory. Predator Laptop has a cost of P502, a selling price of P568, a cost to complete of P53, and a cost to sell of P38. What is the lower-of-cost-or-net realizable inventory value for Predator Laptop? A. P477 B. P515 C. P502 D. P530 2.) If the month-end bank statement shows a balance of P360,000, outstanding checks are P120,000, a deposit of P40,000 was in transit at month end, and a check for P5,000 was erroneously charged by the bank against the account, the correct balance in the bank account at month end is A. P285,000 B. P275,000 C. P205,000 D. P435,000
Blake Company purchased two identical inventory items. The item purchased first cost $27.00, and the item purchased second cost $28.00. Blake sold one of the items for $50.00. Which of the following statements is true? Multiple Choice O The dollar amount assigned to ending inventory will be the same matter which inventory cost flow method is used. Cost of goods sold will be higher if Blake uses the FIFO rather than the weighted-average inventory cost flow method. Ending inventory will be lower if Blake uses the weighted-average rather than the FIFO inventory cost flow method. Gross margin will be higher if Blake uses LIFO rather than the FIFO inventory cost flow method.
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What will be the correct answer for weight average cost method for ending inventory and cost of goods sold?
Current Attempt in Progress Waterway Frame Camera Shop uses the lower-of-cost-or-net realizable value basis for its inventory. The following data are available at December 31. Item Cameras: Minolta Canon Light Meters: Vivitar Kodak Units Cost per Unit 8 10 20 15 The ending inventory $163 $ 154 121 120 Net Realizable Value per Unit $155 156 110 What amount should be reported for inventory on Waterway Frame Camera Shop's balance sheet, assuming the lower-of-cost-or-net realizable value rule is applied? 135
Poe, Co. uses LIFO for its inventory valuation. The original cost of Item #BB-8, the only inventory item of Poe, was $12,000. The current selling price and replacement cost are $13,500 and $9,500, respectively. Costs to sell are estimated to be $2,700. The normal profit margin is 10% of the original cost.
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Smith Company's inventory cost is $100. The expected sales price is $110, estimated selling costs are $6. The normal gross profit ratio is 20% of selling price. The replacement cost of the inventory is $95. Smith Company uses the LIFO inventory method so must use the lower of cost or market approach and this inventory item should be valued at Correct answer came back as $95, Id love an explanation for this. Thank you!