Novelli's Nursery has developed the following data in order to calculate the lower of cost or net realizable value for its products. The individual products are listed within the categories of trees. SellingPriceCostBroad leaf trees: Ash$2,080 $1,620 Beech 2,620 1,520 Needle leaf trees: Cedar$3,060 $1,670 Fir 4,300 3,270 Fruit trees: Apple$2,080 $1,320 Cherry 2,720 1,720 The costs to sell are 10% of selling price. Required:Determine the reported inventory value assuming the lower of cost or net realizable value rule is applied to categories of trees. ProductCostNRVLower of Cost or NRVAsh Beech Broad leaf trees Cedar Fir Needle leaf trees Apple Cherry Fruit trees Inventory value

Formula: NRV = Selling price - Sales commission

Answered: Novelli's Nursery has developed the…

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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Novelli's Nursery has developed the following data in order to calculate the lower of cost or net realizable value for its products. The individual products are listed within the categories of trees.

	Selling Price	Cost
Broad leaf trees:
Ash	$	2,080	$	1,620
Beech		2,620		1,520
Needle leaf trees:
Cedar	$	3,060	$	1,670
Fir		4,300		3,270
Fruit trees:
Apple	$	2,080	$	1,320
Cherry		2,720		1,720

The costs to sell are 10% of selling price.

Required:
Determine the reported inventory value assuming the lower of cost or net realizable value rule is applied to categories of trees.

Product	Cost	NRV	Lower of Cost or NRV
Ash
Beech
Broad leaf trees
Cedar
Fir
Needle leaf trees
Apple
Cherry
Fruit trees
Inventory value

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