Problem 6-4B (Algo) Report inventory using lower of cost and net realizable value (LO6-6) A home improvement store, like Lowe's, carries the following items: Inventory Itens Unit Cost $7.30 Hammers Saws Screwdrivers 10.30 2.30 Drills One-gallon paint cans Paintbrushes Quantity 100 50 130 40 160 180 Revenues 25.30 5.00 6.30 Required: 1. Compute the total cost of inventory. 2. Determine whether each Inventory Item would be reported at cost or net realizable value, and then place that unit amount in the "Lower of Cost and NRV per unit" column. Multiply the quantity of each inventory item by the appropriate cost or NRV unit amount and place the total in the "Total" column. 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. Assets Unit NRV $7.80 9.30 2.90 22.60 5.30 6.80 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Determine the financial statement effects of using lower of cost and net realizable value to report inventory. (Make sure to enter amounts leading to account reduction with a minus sign.) Income Statement: Balance Sheet: Expenses Liabilities Net Income Stockholders' Equity
Problem 6-4B (Algo) Report inventory using lower of cost and net realizable value (LO6-6) A home improvement store, like Lowe's, carries the following items: Inventory Itens Unit Cost $7.30 Hammers Saws Screwdrivers 10.30 2.30 Drills One-gallon paint cans Paintbrushes Quantity 100 50 130 40 160 180 Revenues 25.30 5.00 6.30 Required: 1. Compute the total cost of inventory. 2. Determine whether each Inventory Item would be reported at cost or net realizable value, and then place that unit amount in the "Lower of Cost and NRV per unit" column. Multiply the quantity of each inventory item by the appropriate cost or NRV unit amount and place the total in the "Total" column. 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. Assets Unit NRV $7.80 9.30 2.90 22.60 5.30 6.80 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Determine the financial statement effects of using lower of cost and net realizable value to report inventory. (Make sure to enter amounts leading to account reduction with a minus sign.) Income Statement: Balance Sheet: Expenses Liabilities Net Income Stockholders' Equity
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Problem 6-4B (Algo) Report inventory using lower of cost and net realizable value (LO6-6)
A home improvement store, like Lowe's, carries the following items:
Inventory Itens
Unit Cost
$7.30
Hammers
Saws
10.30
2.30
25.30
5.80
6.30
Screwdrivers
Drills
One-gallon paint cans
Paintbrushes
Quantity
100
50
130
40
Revenues
160
180
Assets
Required:
1. Compute the total cost of inventory.
2. Determine whether each inventory item would be reported at cost or net realizable value, and then place that unit amount in the
"Lower of Cost and NRV per unit" column. Multiply the quantity of each inventory item by the appropriate cost or NRV unit amount and
place the total in the "Total" column.
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.
Unit NRV
$7.80
9.30
2.90
Complete this question by entering your answers in the tabs below.
22.60
5.30
6.80
Required 1 Required 2
Required 4
Determine the financial statement effects of using lower of cost and net realizable value to report inventory. (Make sure to enter amounts leading to
account reduction with a minus sign.)
Required 3
Income Statement:
Balance Sheet:
Expenses
Liabilities
+
Net Income
Stockholders'
Equity
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