Decker Company has five products in its inventory. Information about ending inventory follows. Unit Product Quantity Cost $ A 1,100 30 35 4 11 34 BUDE 900 800 400 800 Unit Selling Price $36 38 12 10 33 The cost to sell for each product consists of a 10 percent sales commission. 1. Determine the carrying value of ending inventory, assuming the lower of cost or net realizable value (LCNRV) rule is applied to individual products. 2. Determine the carrying value of ending inventory, assuming the LCNRV rule is applied to the entire inventory. 3. Assuming inventory write-downs are common for Decker, record any necessary year- end adjusting entry based on the amount calculated in requirement 2.
Decker Company has five products in its inventory. Information about ending inventory follows. Unit Product Quantity Cost $ A 1,100 30 35 4 11 34 BUDE 900 800 400 800 Unit Selling Price $36 38 12 10 33 The cost to sell for each product consists of a 10 percent sales commission. 1. Determine the carrying value of ending inventory, assuming the lower of cost or net realizable value (LCNRV) rule is applied to individual products. 2. Determine the carrying value of ending inventory, assuming the LCNRV rule is applied to the entire inventory. 3. Assuming inventory write-downs are common for Decker, record any necessary year- end adjusting entry based on the amount calculated in requirement 2.
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 2E: Inventory Write-Down Stiles Corporation uses the FIFO cost flow assumption and is in the process of...
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