9th Edition

ISBN: 9781260216141

Author: SPICELAND

Publisher: MCG CUSTOM

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Chapter 9, Problem 9.3E

Lower of cost or net realizable value

• LO9–1

Tatum Company has four products in its inventory. Information about the December 31, 2018, inventory is as follows:

Product Total	Cost Total	Net Realizable Value
101	$120,000	$100,000
102	90,000	110,000
103	60,000	50,000
104	30,000	50,000

Required:

1. Determine the carrying value of inventory at December 31, 2018, assuming the lower of cost or net realizable value

(LCNRV) rule is applied to individual products.

2. Assuming that inventory write-downs are common for Tatum Company, record any necessary year-end adjusting entry.

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Chapter 9, Problem 9.2E

Chapter 9, Problem 9.4E

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Chapter 9 Solutions

INTERMEDIATE ACCOUNTING(LL)-W/CONNECT

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

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