Home Furnishings reports inventory using the lower of cost and net realizable value (NRV) Below is information related to its year end inventory Required 1 Calculate the total recorded cost of ending inventory before any adjustments 2 Calculate ending inventory using the lower of cost and net reali...

1 Calculation of total recorded cost of ending inventory before any adjustments Inventory Quantity in Unit cost in Total cost Furniture 200 85 17000 Electronics 50 400 20000 Closing inventory at cost 37000 2 Calculation of ending Inventory using lower of cost net realizable value Inventory Quantity Unit cost NVR Value Furniture 200 85 100 17000 200 85 Electronics 50 400 300 15000 50 300 Closing inventory 32000 3 Cost of Goods sold Dr To inventory 5000 Being difference of cost lower of cost on NRV is recorded as adjustment ...

Home Furnishings reports inventory using the lower of cost and net realizable value (NRV). Below is information

Question:

Home Furnishings reports inventory using the lower of cost and net realizable value (NRV). Below is information related to its year-end inventory.

Inventory Quantity Unit Cost Unit NRV Furniture 200 $ 85 $100 Electronics 50 400 300

Required:

1. Calculate the total recorded cost of ending inventory before any adjustments.

2. Calculate ending inventory using the lower of cost and net realizable value.

3. Record any necessary adjustment to inventory.

4. Explain the impact of the adjustment in the financial statements.

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Financial Accounting

ISBN: 978-1259914898

5th edition

Authors: David Spiceland, Wayne M. Thomas, Don Herrmann

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Question Posted: May 14, 2020 05:48 AM

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Home Furnishings reports inventory using the lower of cost and net realizable value (NRV). Below is information

Question:

Inventory Quantity Unit Cost Unit NRV Furniture 200 $ 85 $100 Electronics 50 400 300

Step by Step Answer:

Financial Accounting

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