Question: Frobisher Inc Frobisher uses the lower of cost and NRV

Frobisher Inc. (Frobisher) uses the lower of cost and NRV rule to value its inventory. Frobisher’s inventory on February 28, 2017 had a cost of $1,125,000 and a NRV of $1,035,000.

Required:
a. By how much should Frobisher’s inventory be written down?
b. Prepare the journal entry Frobisher should prepare to record the writedown.
c. What amount should be reported for inventory on Frobisher’s February 28, 2017 balance sheet?




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  • CreatedFebruary 26, 2015
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