Sanchez Company was formed on January 1 of the current year and is preparing the annual financial statements dated December 31, current year. Ending inventory information about the four major items stocked for regular sale follows: ENDING INVENTORY, CURRENT YEAR Item Quantity on Hand Unit Cost When Acquired (FIFO) Net Realizable Value (Market) at Year-End A 30 $ 20 $ 15 B 55 40 44 C 35 52 55 D 15 27 32 Required: Compute the valuation that should be used for the current year ending inventory using lower of cost or net realizable value applied on an item-by-item basis. What will be the effect of the write-down of inventory to lower of cost or net realizable value on cost of goods sold for the year ended December 31, current year? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the valuation that should be used for the current year ending inventory using lower of cost or net realizable value applied on an item-by-item basis. Item A B C D Quantity Total Cost Total Net Realizable Value Lower of Cost or NRV Required 1 Required 2 30 55 35 15 Total $0 $0 $0
Sanchez Company was formed on January 1 of the current year and is preparing the annual financial statements dated December 31, current year. Ending inventory information about the four major items stocked for regular sale follows: ENDING INVENTORY, CURRENT YEAR Item Quantity on Hand Unit Cost When Acquired (FIFO) Net Realizable Value (Market) at Year-End A 30 $ 20 $ 15 B 55 40 44 C 35 52 55 D 15 27 32 Required: Compute the valuation that should be used for the current year ending inventory using lower of cost or net realizable value applied on an item-by-item basis. What will be the effect of the write-down of inventory to lower of cost or net realizable value on cost of goods sold for the year ended December 31, current year? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the valuation that should be used for the current year ending inventory using lower of cost or net realizable value applied on an item-by-item basis. Item A B C D Quantity Total Cost Total Net Realizable Value Lower of Cost or NRV Required 1 Required 2 30 55 35 15 Total $0 $0 $0
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Sanchez Company was formed on January 1 of the current year and is preparing the annual financial
statements dated December 31, current year. Ending inventory information about the four major items
stocked for regular sale follows: ENDING INVENTORY, CURRENT YEAR Item Quantity on Hand Unit Cost
When Acquired (FIFO) Net Realizable Value (Market) at Year-End A 30 $ 20 $ 15 B 55 40 44 C 35 52 55 D
15 27 32
Required: Compute the valuation that should be used for the current year ending inventory using lower of
cost or net realizable value applied on an item-by-item basis. What will be the effect of the write-down of
inventory to lower of cost or net realizable value on cost of goods sold for the year ended December 31,
current year?
Complete this question by entering your answers in the tabs below.
Required 1
Required 2
Compute the valuation that should be used for the current year ending inventory using lower of cost or
net realizable value applied on an item-by-item basis.
Item
A
B
C
D
Quantity Total Cost Total Net Realizable Value Lower of Cost or NRV
Required 1
Required 2
30
55
35
15
Total $0
$0
$0
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