Professional Simulation The professional simulation for this chapter asks you to address questions related to inventory valuation and measurement. Prepare responses to all parts.

KWW_Professional Simulation Inventory Valuation Time Remaining 1 hour 40 minutes Directione Situation LCNTV Joumal Entry Explanation Resources T.L. Wang Inc. manufactures and sells four products, the inventories of which are priced at cost or NRV, whichever is lower. A normal profit margin rate of 30% is usually maintained on each of the four products. The following information was compiled as of December 31, 2015 (amounts in thousands). Product A ABCD Original Cost HK$17.50 48.00 35.00 47.50 Estimated Cost to Complete and Sell HK$15.00 26.00 38.00 49.00 Expected Selling Price HK$ 30.00 100.00 80.00 95.00 Directions Situation LONETV Joumal Entry Explanation Resources Use a computer worksheet to prepare a schedule containing unit values for determining the LCNRV on an individual-product basis. The last column of the schedule should contain, for each product, the unit value for the purpose of inventory valuation resulting from the application of the LCNRV rule. Direction Situation LCNTV Joumal Entry Explanation Resource Prepare the journal entry to record the LCNRV for T.L. Wang. Assume 1,000 units of each product and that T.L. Wang uses a perpetual inventory system. Assume also that the cost-of-goods-sold method is used to record write-downs. Direction Sitton LCNIV Joumal Entry Explanation Resources Prepare a brief memorandum to explain why expected selling prices are important in the application of the LCNRV rule.