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2 years ago

Calculating Lower-of-Cost-or-Net Realizable Value

Business

1 answer:

Tju [1.3M]2 years ago

7 0

Answer:

Anne Traylor Inc.

Calculating Lower-of-Cost-or-Net Realizable Value

The inventory cost to report on the balance sheet on June 30, 2020, assuming that the company applies the lower-of-cost-or-net realizable value rule to each individual inventory item is:

= $8,990.

Explanation:

a) Data and Calculations:

Inventory Quantity Selling Cost NRV Inventory Lower-of-Cost-or-

Item Price to Sell Cost Net Realizable Value

#100 70 $24 $5 $19 $16 $1,120 ($16 * 70)

#101 100 22 4 18 17 1,700 ($17 * 100)

#115 50 35 6 29 31 1,450 ($29 * 50)

#118 120 40 6 35 29 3,480 ($29 * 120)

#120 25 18 4 14 10 250 ($10 * 25)

#128 45 30 8 22 26 990 ($22 * 45)

Total $8,990

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Answer:

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