Answer:
a. $410,749
b. $
418,286
Explanation:
Given;
Part Quantity Cost per Unit Net Realizable Value Carrying amount
110 620 $117.00 $123.00 $117.00
111 920 $73.80 $64.00 $64.00
112 530 $98.40 $93.00 $93.00
113 190 $209.10 $221.40 $209.10
120 370 $252.00 $256.00 $252.00
121 a 1,700 $20.00 $1.00 $1
122 330 $295.20 $289.00 $289.00
The cost or net realizable value of inventory requires that inventory should not be carried at an amount higher than the net realizable value. this is due to the fact that inventory is initially recognized by cost.
Applying the LCNRV method to each item Inventory as of December 31, 2020
= 620 * 117 + 920 * 64 + 530 * 93 + 190 * 209.10 + 370 * 252 + 1700 * 1 + 330 * 289
= $410,749
Applying the LCNRV method to the total of the inventory. Inventory as of December 31, 2020
= 620 * 117 + 920 * 73.8 + 530 * 98.4 + 190 * 209.10 + 370 * 252 + 1700 * 20 + 330 * 295.2
= $456,973
and
= 620 * 123 + 920 * 64 + 530 * 93 + 190 * 221.40 + 370 * 256 + 1700 * 1 + 330 * 289
= $
418,286
