Product Cost NRV Ash Beech Cedar Fir Apple Cherry Total inventory Inventory value Lower of Cost or NRV
Product Cost NRV Ash Beech Cedar Fir Apple Cherry Total inventory Inventory value Lower of Cost or NRV
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter2: The Accounting Information System
Section: Chapter Questions
Problem 5MCQ
Related questions
Question
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 | $ 1,840 | $ 1,740 |
| Beech | 2,260 | 1,640 |
| Needle leaf trees: | ||
| Cedar | $ 2,580 | $ 1,790 |
| Fir | 3,700 | 3,390 |
| Fruit trees: | ||
| Apple | $ 1,840 | $ 1,440 |
| Cherry | 2,360 | 1,840 |
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 the total inventory.
Transcribed Image Text:Product
Cost
NRV
Ash
Beech
Cedar
Fir
Apple
Cherry
Total inventory
Inventory value
Lower of
Cost or NRV
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