The inventory of Royal Decking consisted of five products. Information about the December 31, 2016, inventoryis as follows:Per UnitTTTProductSelling PriceCost$ 40$ 609010040801001302030Costs to sell consist only of a sales commission equal to 10% of selling price and shipping costs equal to 5% ofcost.Required:What unit value should Royal Decking use for each of its products when applying the lower of cost and net realiz-able value rule to units of inventory?

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Answered: The inventory of Royal Decking…

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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M3
I need help calculating not only the net realizable value for all four products but also calculating the ending inventory using the LOWER OF COST OR MARKET METHOD for- individual items, category, and total inventory (Please Show Calculations).
Forest Company has five products in its inventory. Information about ending inventory follows. Product Quantity Unit Cost A 1,000 B 800 с 600 D 200 E 600 $ 10 15 3 7 14 Unit Replacement Unit Selling Cost Price $ 16 18 8 6 13 $ 12 11 2 4 12 The cost to sell for each product consists of a 15 percent sales commission. The normal profit for each product is 40 percent of the selling price. Required: 1. Determine the carrying value of ending inventory, assuming the lower of cost or market (LCM) rule is applied to individual products. 2. Determine the carrying value of inventory, assuming the LCM rule is applied to the entire inventory. 3. Assuming inventory write-downs are common for Forest, record any necessary year-end adjusting entry based on the amount calculated in requirement 2.
A3
A-2
The inventory of Royal Decking consisted of five products. Information about ending inventory is as follows: Product Cost $ 50 A B 90 C 50 D 50 E 10 Product A Per Unit Costs to sell consist of a sales commission equal to 20% of selling price and shipping costs equal to 10% of cost. BUDE Required: What unit value should Royal Decking use for each of its products when applying the lower of cost or net realizable value (LCNRV) rule to units of ending inventory? C Selling Price $ 70 130 Cost 90 80 20 NRV Per Unit Inventory Value
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Blossom Company sells three different categories of tools (small, medium, and large). The cost and net realizable value of its inventory of tools are as follows. Net Realizable Cost Value Small $63,300 $59,600 Medium 289,600 261,000 Large 151,300 172,500 Determine the value of the company's inventory under the lower-of-cost-or-net realizable value approach. Total inventory value $
The inventory of Royal Decking consisted of five products. Information about ending inventory is as follows: Product A n C D Cost $70 110 70 70 30 Product Per Unit ABCDE Selling Price Costs to sell consist of a sales commission equal to 20% of selling price and shipping costs equal to 10% of cost. Required: What unit value should Royal Decking use for each of its products when applying the lower of cost or net realizable value (LCNRV) rule to units of ending inventory? $90 160 110 100 40 Cost NRV Per Unit Inventory Value
The inventory of Royal Decking consisted of five products. Information about ending inventory is as follows: Product A B C D E Product A Costs to sell consist of a sales commission equal to 10% of selling price and shipping costs equal to 5% of cost. Required: What unit value should Royal Decking use for each of its products when applying the lower of cost or net realizable value (LCNRV) rule to units of ending inventory? BUDE Cost $ 180 220 160 140 90 C Per Unit Selling Price $ 200 240 220 240 125 Cost NRV Per Unit Inventory Value

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