Question

Tan Company is preparing the annual financial statements dated December 31 of the current year. Ending inventory Information about the five major items stocked for regular sale follows: Quantity on Hand ENDING INVENTORY, CURRENT YEAR Net Realizable Unit Cost When Value (Market) Acquired (FIFO) at Year-End $ 13 $ 16 41 31 Item 62 Required: Compute the valuation that should be used for the current year ending inventory using lower of cost or net realizable value applied on an item-by-item basis. Total Net Quantity Total Cost Realizable Value Lower of Cost or NRY Item 62 92 22 82 362 Total

Answer 1

Answer:

Explanation:

Item  Quantity  Total Cost*  Total Net realizable value     Lower of cost

                                                                                                        or NRV

A   62         $806.00             $992.00                                 $  806.00

B   92          $ 3,772.00     $ 2,852.00                                $ 2,852.00

C   22          $  1,166.00     $    1,078.00                        $ 1,078.00

D  82          $2,542.00      $    2,132.00                         $ 2,132.00

E 362          $2,172.00      $3,982.00                                 $ 2,172.00

       

       Total $10,458.00       $ 11,036.00                          $ 9,040.00

*Cost per unit x Total quantity

**NRV per unit x Total quantity