LCM (Lower of Cost or Market) approach: It is an approach that values the inventory at historical cost or lesser than the market replacement cost. The replacement cost refers to the amount that could be realized from the sale of the inventory. NRV (Net Realizable Value) : It refers to an estimated selling price that a company expects to collect in the form of cash from the customers by the sale of inventory. The value is reduced by the expected cost of completion, disposal and transportation. Sales commission and shipping costs also included in the predictable cost. To Calculate: The carrying value of inventory at year-end by using the rule of LCM and NRV applied to (a) individual products, (b) product categories, and (c) total inventory.

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Answer 1

Question

Chapter 9, Problem 9.2P

1.

To determine

LCM (Lower of Cost or Market) approach: It is an approach that values the inventory at historical cost or lesser than the market replacement cost. The replacement cost refers to the amount that could be realized from the sale of the inventory.

NRV (Net Realizable Value): It refers to an estimated selling price that a company expects to collect in the form of cash from the customers by the sale of inventory. The value is reduced by the expected cost of completion, disposal and transportation. Sales commission and shipping costs also included in the predictable cost.

To Calculate: The carrying value of inventory at year-end by using the rule of LCM and NRV applied to (a) individual products, (b) product categories, and (c) total inventory.

2.

To determine

The amount of the loss for (a) individual products, (b) product categories, and (c) total inventory.

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Crane Construction Co. has consistently used the percentage-of- completion method of recognizing revenue. During 2018, Crane entered into a fixed-price contract to construct an office building for $27,000,000. Information relating to the contract is as follows: At December 31 2018 2019 Percentage of completion 10% 40% Estimated total cost at completion $ 2,00,00,000 $ 2,14,00,000 $ 33,10,000 Gross profit recognized (cumulative) $ 13,80,000 Contract costs incurred during 2019 were: a. $5,250,000. b. $6,560,000. c. $8,190,000. d. $8,560,000.

Solve this following requirements on these general accounting question

A company performed $8,635 of services and received $3,000 in cash with the remaining amount to be paid in 60 days with no interest. What would the effect of this transaction on the company s current month-end accounting equation? A. $3,000 increase in Assets; $5,635 decrease in Liabilities; $8,635 increase in Stockholders' Equity. B. $8,635 increase in Assets; No effect on Liabilities; $8,635 increase in Stockholders' Equity. C. $5,635 increase in Assets; No effect on Liabilities; $5,635 increase in Stockholders' Equity. D. $8,635 increase in Assets; $8,635 increase in Liabilities; No effect on Stockholders' Equity.

Answer 2

Question

Chapter 9, Problem 9.2P

1.

To determine

LCM (Lower of Cost or Market) approach: It is an approach that values the inventory at historical cost or lesser than the market replacement cost. The replacement cost refers to the amount that could be realized from the sale of the inventory.

NRV (Net Realizable Value): It refers to an estimated selling price that a company expects to collect in the form of cash from the customers by the sale of inventory. The value is reduced by the expected cost of completion, disposal and transportation. Sales commission and shipping costs also included in the predictable cost.

To Calculate: The carrying value of inventory at year-end by using the rule of LCM and NRV applied to (a) individual products, (b) product categories, and (c) total inventory.

2.

To determine

The amount of the loss for (a) individual products, (b) product categories, and (c) total inventory.

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 3

Question

Chapter 9, Problem 9.2P

1.

To determine

LCM (Lower of Cost or Market) approach: It is an approach that values the inventory at historical cost or lesser than the market replacement cost. The replacement cost refers to the amount that could be realized from the sale of the inventory.

NRV (Net Realizable Value): It refers to an estimated selling price that a company expects to collect in the form of cash from the customers by the sale of inventory. The value is reduced by the expected cost of completion, disposal and transportation. Sales commission and shipping costs also included in the predictable cost.

To Calculate: The carrying value of inventory at year-end by using the rule of LCM and NRV applied to (a) individual products, (b) product categories, and (c) total inventory.

2.

To determine

The amount of the loss for (a) individual products, (b) product categories, and (c) total inventory.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 4

Question

Chapter 9, Problem 9.2P

1.

To determine

LCM (Lower of Cost or Market) approach: It is an approach that values the inventory at historical cost or lesser than the market replacement cost. The replacement cost refers to the amount that could be realized from the sale of the inventory.

NRV (Net Realizable Value): It refers to an estimated selling price that a company expects to collect in the form of cash from the customers by the sale of inventory. The value is reduced by the expected cost of completion, disposal and transportation. Sales commission and shipping costs also included in the predictable cost.

To Calculate: The carrying value of inventory at year-end by using the rule of LCM and NRV applied to (a) individual products, (b) product categories, and (c) total inventory.

2.

To determine

The amount of the loss for (a) individual products, (b) product categories, and (c) total inventory.

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 5

Chapter 9, Problem 9.2P

1.

To determine

LCM (Lower of Cost or Market) approach: It is an approach that values the inventory at historical cost or lesser than the market replacement cost. The replacement cost refers to the amount that could be realized from the sale of the inventory.

NRV (Net Realizable Value): It refers to an estimated selling price that a company expects to collect in the form of cash from the customers by the sale of inventory. The value is reduced by the expected cost of completion, disposal and transportation. Sales commission and shipping costs also included in the predictable cost.

To Calculate: The carrying value of inventory at year-end by using the rule of LCM and NRV applied to (a) individual products, (b) product categories, and (c) total inventory.

2.

To determine

The amount of the loss for (a) individual products, (b) product categories, and (c) total inventory.

Answer 6

Chapter 9, Problem 9.2P

1.

To determine

LCM (Lower of Cost or Market) approach: It is an approach that values the inventory at historical cost or lesser than the market replacement cost. The replacement cost refers to the amount that could be realized from the sale of the inventory.

NRV (Net Realizable Value): It refers to an estimated selling price that a company expects to collect in the form of cash from the customers by the sale of inventory. The value is reduced by the expected cost of completion, disposal and transportation. Sales commission and shipping costs also included in the predictable cost.

To Calculate: The carrying value of inventory at year-end by using the rule of LCM and NRV applied to (a) individual products, (b) product categories, and (c) total inventory.

Answer 7

Chapter 9, Problem 9.2P

1.

To determine

LCM (Lower of Cost or Market) approach: It is an approach that values the inventory at historical cost or lesser than the market replacement cost. The replacement cost refers to the amount that could be realized from the sale of the inventory.

NRV (Net Realizable Value): It refers to an estimated selling price that a company expects to collect in the form of cash from the customers by the sale of inventory. The value is reduced by the expected cost of completion, disposal and transportation. Sales commission and shipping costs also included in the predictable cost.

To Calculate: The carrying value of inventory at year-end by using the rule of LCM and NRV applied to (a) individual products, (b) product categories, and (c) total inventory.

Answer 8

2.

To determine

The amount of the loss for (a) individual products, (b) product categories, and (c) total inventory.

Answer 9

2.

To determine

The amount of the loss for (a) individual products, (b) product categories, and (c) total inventory.

Answer 10

Expert Solution & Answer

Answer 11

Expert Solution & Answer

Answer 12

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Answer 13

Ch. 9 - Explain the (a) lower of cost or net realizable...Ch. 9 - What are the various levels of aggregation to...Ch. 9 - Describe the alternative approaches for recording...Ch. 9 - Explain the gross profit method of estimating...Ch. 9 - The Rider Company uses the gross profit method to...Ch. 9 - Explain the retail inventory method of estimating...Ch. 9 - Both the gross profit method and the retail...Ch. 9 - Define each of the following retail terms: initial...Ch. 9 - Explain how to estimate the average cost of...Ch. 9 - Prob. 9.10Q

Solution Summary: The author explains how to calculate the carrying value of inventory at year-end by using the rule of LCM and NRV.

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The amount of the loss for (a) individual products, (b) product categories, and (c) total inventory.

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Chapter 9 Solutions