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Problem 6-4A (Algo) Report inventory using lower of cost and net realizable value (LO6-6) A local Chevrolet dealership carries the following types of vehicles: Inventory Items Quantity Unit NRV Vana 2 $15,000 Trucks 15,000 2-door sedans 13,000 18,000 4-door sedans Sports cars SUVE 27,000 30,000 26,000 18,000 Because of recent increases in gasoline prices, the car dealership has noticed a reduced demand for its SUVs, vans, and trucks. Required: 1. Compute the total cost of the entire inventory. 2. Determine whether each inventory item would be reported at cost or net realizable value (NRV). Enter the amount of either the Unit Cost or Unit NRV in the "Lower of Cost and NRV per unit" column and then multiply this amount by the quantity of each inventory item and enter it in the Total column. Unit Cost $17,000 16,000 11,000 15,000 3. Record any necessary adjusting entry to write down inventory from cost to net realizable value. 4. Determine the financial statement effects of using lower of cost and net realizable value to report inventory. Complete this question by entering your answers in the tabs below. Total cost Required 1 Required 2 Required 3 Compute the total cost of the entire inventory. Required 4 Required 2

Problem 6-4A (Algo) Report inventory using lower of cost and net realizable value (LO6-6) A local Chevrolet dealership carries the following types of vehicles: Inventory Items Quantity Unit NRV Vana 2 $15,000 Trucks 15,000 2-door sedans 13,000 18,000 4-door sedans Sports cars SUVE 27,000 30,000 26,000 18,000 Because of recent increases in gasoline prices, the car dealership has noticed a reduced demand for its SUVs, vans, and trucks. Required: 1. Compute the total cost of the entire inventory. 2. Determine whether each inventory item would be reported at cost or net realizable value (NRV). Enter the amount of either the Unit Cost or Unit NRV in the "Lower of Cost and NRV per unit" column and then multiply this amount by the quantity of each inventory item and enter it in the Total column. Unit Cost $17,000 16,000 11,000 15,000 3. Record any necessary adjusting entry to write down inventory from cost to net realizable value. 4. Determine the financial statement effects of using lower of cost and net realizable value to report inventory. Complete this question by entering your answers in the tabs below. Total cost Required 1 Required 2 Required 3 Compute the total cost of the entire inventory. Required 4 Required 2

FINANCIAL ACCOUNTING
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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Problem 6-4A (Algo) Report inventory using lower of cost and net realizable value (LO6-6) A local Chevrolet dealership carries the following types of vehicles: Unit NRV $15,000 15,000 13,000 18,000 30,000 18,000 Because of recent increases in gasoline prices, the car dealership has noticed a reduced demand for its SUVs, vans, and trucks. Required: 1. Compute the total cost of the entire inventory. 2. Determine whether each inventory item would be reported at cost or net realizable value (NRV). Enter the amount of either the Unit Cost or Unit NRV in the "Lower of Cost and NRV per unit" column and then multiply this amount by the quantity of each inventory item and enter it in the Total column. Inventory Items Vana Trucks 2-door sedans 4-door sedans Sports cars SUVS Quantity 2 5 1 Unit Cost $17,000 16,000 11,000 Total cost 15,000 27,000 26,000 3. Record any necessary adjusting entry to write down inventory from cost to net realizable value. 4. Determine the financial statement effects of using lower of cost and net realizable value to report inventory. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute the total cost of the entire inventory. Required 4 Required 1 < Prev Required 2 > 4 of 10 Next >
Transcribed Image Text:Problem 6-4A (Algo) Report inventory using lower of cost and net realizable value (LO6-6) A local Chevrolet dealership carries the following types of vehicles: Unit NRV $15,000 15,000 13,000 18,000 30,000 18,000 Because of recent increases in gasoline prices, the car dealership has noticed a reduced demand for its SUVs, vans, and trucks. Required: 1. Compute the total cost of the entire inventory. 2. Determine whether each inventory item would be reported at cost or net realizable value (NRV). Enter the amount of either the Unit Cost or Unit NRV in the "Lower of Cost and NRV per unit" column and then multiply this amount by the quantity of each inventory item and enter it in the Total column. Inventory Items Vana Trucks 2-door sedans 4-door sedans Sports cars SUVS Quantity 2 5 1 Unit Cost $17,000 16,000 11,000 Total cost 15,000 27,000 26,000 3. Record any necessary adjusting entry to write down inventory from cost to net realizable value. 4. Determine the financial statement effects of using lower of cost and net realizable value to report inventory. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute the total cost of the entire inventory. Required 4 Required 1 < Prev Required 2 > 4 of 10 Next >
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