You have been asked by the financial vice president to develop a short presentation on the LCNRV method for inventory purposes. The financial VP needs to explain this method to the president because it appears that a portion of the company’s inventory has declined in value. Instructions The financial vice president asks you to answer the following questions. a.    What is the purpose of the LCNRV method? b.    What is meant by “net realizable value”? c.    Do you apply the LCNRV method to each individual item, to a category, or to the total of the inventory? Explain. d.    What are the potential disadvantages of the LCNRV method?

Q: 1. On which of the following instances is cost estimation not permitted? A. Estimating the cost of…

A: Hi student Since there are multiple questions, we will answer only first question.

Q: Olga is the accountant at Schowalter incorporated responsible for inventory Schowalter incorporated…

A: Inventory is a current asset of the company. It consists of goods available for sale, goods in…

Q: Under what circumstances would a company need to estimate its inventory? What are the differences…

A: The worth of the items in your inventory at the time of your most recent physical count is the…

Q: Which of the following costs do not come under inventory carrying cost calculation? Investment in a…

A: The ideal order quantity for a corporation to purchase in order to minimize inventory costs is known…

Q: True or False Question 1. a) Inventory is anything purchased by a business.     b) Cost of Goods…

A: In the balance sheet of a company we can see different assets (and liabilities) of a…

Q: 1. One of the assessments made in credit sales is unwillingness to pay, please explain what is meant…

A: Note : As per the guidelines, only first question will be answered. Kindly post the remaining parts…

Q: Although merchandising transactions affect the balance sheet in reporting inventory, they primarily…

A: Solution: Merchandising transactions involves purchase and sales of goods. these transactions…

Q: ethod to use or are there other determinants that are more important in your opinion? Provide…

A: FIFO stands for first in first out. It values the inventory on the basis of first costs. The goods…

Q: Suppose I have two items in my inventory and I use FIFO to value it. I start to buy a new item and…

A: FIFO is also written as first in first out and LIFO is also written as last in first out. These are…

Q: Which of the following statements is true about the periodic inventory system? Question 2Select one:…

A: Inventory valuation is referred to as that method which helps in assigning a monetary value to the…

Q: Please refer to the picture below for the information. Please show the complete solution and kinldy…

A: In 2015 year, Beginning inventory at cost = 200000 Beginning inventory at net realizable value =…

Q: How do we record and report inventory shrinkage? Which accounts are affected?

A: Inventory shrinkage refers to the loss of inventory that occurs due to theft, damage, spoilage, or…

Q: Why would a company choose to use an inventory costing method that estimates the cost of the goods…

A: In this question, we  explain that why would a company choose to use an inventory costing method…

Q: Which of the following is true about the issues of the gross profit method of estimating inventory?…

A: The gross profit method is a method for estimating the value of ending inventory and cost of…

Q: Please help with problem

A: To compute the inventory amount to be displayed on the balance sheet, apply the lower of cost or…

Q: 1, how can assets and liabilities be classified for a more informative balance sheet?

A: Introduction :- A classified balance sheet is a financial statement with classifications like…

Q: 2. Which financial statement would users find these inventory accounts?

A: As per the guidelines, only one question is allowed to be answered. Please upload different…

Q: Discuss three main reasons for holding inventories. (6 marks) 2-Discuss why Organizations seek to…

A: We’ll answer the first question since the exact one wasn’t specified. Please submit a new question…

Q: a) Discuss the reasons why a proper understanding of the free on board (FOB) terms is important when…

A: FOB is an abbreviation for free on board. Free on Board means the seller takes risk till the time…

Q: When inventory is sold, the cost of the inventory is removed from the Inventory account and reported…

A: COST OF GOODS SOLDCost of Goods Sold States the Amount of Cost Included in the Total Number of Units…

Q: • Explain why there isn't there a "Cost of merchandise sold" expense for a service business.…

A: We’ll answer the first question since the exact one wasn’t specified. Please submit a new question…

Q: Using the following letters to represent items: P = purchases (net) C = cost of good sold B =…

A: We know, Ending inventory = Begining inventory + Purchases - Cost of good sold E = B + P - C

Q: When creating financial statements, why is it essential to create the income statement before the…

A: An income statement summarizes a company's revenues and expenses over a specific period, showing its…

Q: Which of the following included in the buyer's cost? A. All the descriptions are tight. B. Insurance…

A: Inventory cost refers to the cost that is related to the business associated with the holding…

Q: Which inventory system would allow a business to determine inventory shrinkage (breakage, theft,…

A: Introduction:- Under Perpetual inventory system tracking of all sales and inventory immediately.…

Q: Briefly explain the "accrual basis assumption" and why financial statements are prepared under this…

A: As per our protocol we provide solution to the one question only but as you have asked multiple…

Q: Which of the following statement is FALSE for Merchandise inventory of the Business? a. It is a…

A: Merchandise inventory is classified as a current asset on the balance sheet. Assets normally have a…

Q: Need Help on the following question. Question #1 You have been hired by the CEO of a…

A: Inventory: The goods held by organization for using it captively for production of goods and…

Q: Identify the following questions as most likely to be asked by an internal (I) or an external (E)…

A: Definition: Internal users: The internal users are the users of the information who are within the…

Q: merchandising company in QBO? Select one: O O O O a. Inventory b. Other asset c. Other current asset…

A: Inventory is accounted for as an assets, Which means It will shows in Companies Balance sheet.…

Q: Accountants at UltraTech obtain their values for inventory and total assets, calculate the balance…

A: Inventory to assets ratio is a financial ratio used for the analysis of financials of the company.…

Q: The following information is taken from a company's records. Cost Market value per Unit per Unit…

A: As per IAS 2 inventory is to be measured at cost or Net realizable value whichever is lower. Here…

Q: What factors might impact on the management’s selection of an inventory cost flow assumption? In…

A: Merchandise inventory refers to the cost of goods that are readily available for sale at some random…

Q: Explain inventory overstatement. A merchandising company has asked you to advise it on how to detect…

A: Inventory overstatement is a financial reporting manipulation tactic where a company intentionally…

Q: You just took a new job as a controller of a large company that purchases and sells surf boards (has…

A: Introduction:-   LIFO stands for "Last-In, First-Out" and is a method of inventory valuation where…

Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.