Nash Company uses the LCNRV method, on an individual-item basis, in pricing its inventory items. The inventory at De 2025, included product X. Relevant per-unit data for product X are as follows. Estimated selling price Cost Estimated selling costs Normal profit $50 41 14 9 There were 1,060 units of product X on hand at December 31, 2025. Product X was incorrectly valued at $39 per unit purposes. All 1.060 units were sold in 2026.
Nash Company uses the LCNRV method, on an individual-item basis, in pricing its inventory items. The inventory at De 2025, included product X. Relevant per-unit data for product X are as follows. Estimated selling price Cost Estimated selling costs Normal profit $50 41 14 9 There were 1,060 units of product X on hand at December 31, 2025. Product X was incorrectly valued at $39 per unit purposes. All 1.060 units were sold in 2026.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter8: Inventories: Special Valuation Issues
Section: Chapter Questions
Problem 2RE: Black Corporation uses the LIFO cost flow assumption. Each unit of its inventory has a net...
Related questions
Question
![Nash Company uses the LCNRV method, on an individual-item basis, in pricing its inventory items. The inventory at December 31,
2025, included product X. Relevant per-unit data for product X are as follows.
Estimated selling price
$50
Cost
41
Estimated selling costs
14
Normal profit
9
There were 1,060 units of product X on hand at December 31, 2025. Product X was incorrectly valued at $39 per unit for reporting
purposes. All 1,060 units were sold in 2026.
Compute the effect of this error on net income for 2025 and the effect on net income for 2026, and indicate the direction of the
misstatement for each year.
Net income for 2025
$
Net income for 2026
$](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fdbab6e77-7656-4819-a626-3073637d56af%2F0b09550d-174a-49fe-a445-7c0c5d0da1d8%2Fjcx1z7n_processed.png&w=3840&q=75)
Transcribed Image Text:Nash Company uses the LCNRV method, on an individual-item basis, in pricing its inventory items. The inventory at December 31,
2025, included product X. Relevant per-unit data for product X are as follows.
Estimated selling price
$50
Cost
41
Estimated selling costs
14
Normal profit
9
There were 1,060 units of product X on hand at December 31, 2025. Product X was incorrectly valued at $39 per unit for reporting
purposes. All 1,060 units were sold in 2026.
Compute the effect of this error on net income for 2025 and the effect on net income for 2026, and indicate the direction of the
misstatement for each year.
Net income for 2025
$
Net income for 2026
$
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
![Intermediate Accounting: Reporting And Analysis](https://www.bartleby.com/isbn_cover_images/9781337788281/9781337788281_smallCoverImage.jpg)
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
![Individual Income Taxes](https://www.bartleby.com/isbn_cover_images/9780357109731/9780357109731_smallCoverImage.gif)
Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT
![Intermediate Accounting: Reporting And Analysis](https://www.bartleby.com/isbn_cover_images/9781337788281/9781337788281_smallCoverImage.jpg)
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
![Individual Income Taxes](https://www.bartleby.com/isbn_cover_images/9780357109731/9780357109731_smallCoverImage.gif)
Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT
![College Accounting, Chapters 1-27](https://www.bartleby.com/isbn_cover_images/9781337794756/9781337794756_smallCoverImage.gif)
College Accounting, Chapters 1-27
Accounting
ISBN:
9781337794756
Author:
HEINTZ, James A.
Publisher:
Cengage Learning,
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College
![Financial Accounting](https://www.bartleby.com/isbn_cover_images/9781337272124/9781337272124_smallCoverImage.gif)
Financial Accounting
Accounting
ISBN:
9781337272124
Author:
Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:
Cengage Learning