Chapter 6, Problem 14Q

To determine

Lower-of-cost-or-net realizable value

The lower-of-cost-or-net realizable value (LCNRV) is a method which requires the reporting of the ending merchandise inventory in the financial statement of a company, at its current market value (net realizable value) or at its historical cost price, whichever is less.

The value, the Entertainment Center T should report for the TVs, under the lower-of-cost-or-net realizable value basis of accounting for inventories, and its reason.