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 >
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 >
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Vishu
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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