Answer:
Chevrolet Dealership
A) The total cost of the entire inventory is:
= $575,000
B) Each inventory would be reported at the LCNRV:
Inventory Items Quantity Reporting Cost/Value
Vans 4 NRV
Trucks 7 NRV
2-door sedans 3 Cost
4-door sedans 5 Cost
Sports cars 1 Cost
SUVs 6 NRV
C) Journal Entry:
Debit Cost of goods sold $27,000
Credit Inventory $27,000
To write-down costs to net realizable values.
D) TRUE.
Explanation:
a) Data and Calculations:
Inventory Items Quantity Cost per unit NRV per Unit LCNRV
Vans 4 27000 $108,000 25000 $100,000
Trucks 7 18000 126,000 17000 119,000
2-door sedans 3 13000 39,000 15000 39,000
4-door sedans 5 17000 85,000 20000 85,000
Sports cars 1 37000 37,000 40000 37,000
SUVs 6 30000 180,000 28000 168,000
Total Cost $575,000 $548,000
