Ace Hardware Store sells two product categories, tools and paint products. Information pertaining to its year-end Inventory is as follows: Inventory, by Product Category Quantity Per Unit Cost Net Realizable Value Tools: Hammers 120 $ 4.00 $ 4.50 Saws Screwdrivers Paint products: 1-gallon cans 100 9.00 8.00 200 1.00 1.60 400 5.00 4.00 120 3.00 3.50 Paint brushes Required: 1. Determine the carrying value of Inventory at year-end, assuming the lower of cost or net realizable value (LCNRV) rule is applied to (a) Individual products, (b) product categories, and (c) total Inventory. 2. Assuming Inventory write-downs are common for Ace, record any necessary year-end adjusting entry for each of the LCNRV applications in requirement 1.

Ace Hardware Store sells two product categories, tools and paint products. Information pertaining to its year-end Inventory is as follows: Inventory, by Product Category Quantity Per Unit Cost Net Realizable Value Tools: Hammers 120 $ 4.00 $ 4.50 Saws Screwdrivers Paint products: 1-gallon cans 100 9.00 8.00 200 1.00 1.60 400 5.00 4.00 120 3.00 3.50 Paint brushes Required: 1. Determine the carrying value of Inventory at year-end, assuming the lower of cost or net realizable value (LCNRV) rule is applied to (a) Individual products, (b) product categories, and (c) total Inventory. 2. Assuming Inventory write-downs are common for Ace, record any necessary year-end adjusting entry for each of the LCNRV applications in requirement 1.

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter27: Adjustments, Financial Statements, And Year-end Accounting For A Manufacturing business

Section: Chapter Questions

Problem 1MP: Reese Manufacturing Company manufactures and sells a limited line of products made to customer...

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