At the end of its accounting cycle, Red Corp. provided the following chart to its accountants:

	Cost	Replacement Cost	Net Realizable Value (NRV)	NRV less Normal Profit
Item A	$550	$570	$580	$500
Item B	$875	$870	$810	$790
Item C	$300	$260	$275	$160
Item D	$50	$75	$90	$88
Item E	$230	$200	$210	$197
Item F	$770	$600	$575	$500

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Question 1

Assume Red Corp. applies Lower of Cost or Net Realizable Value (LCNRV) directly to each individual inventory item. What is the ending inventory value Red Corp. will report for Item A?

Question 1 options:

	$580
	$570
	$500
	$550

Question 2

Assume Red Corp. applies Lower of Cost or Net Realizable Value (LCNRV) directly to each individual inventory item. What is the ending inventory value Red Corp. will report for Item B?

Question 2 options:

	$790
	$810
	$875
	$870

Question 3

Assume Red Corp. applies Lower of Cost or Net Realizable Value (LCNRV) directly to each individual inventory item. What is the ending inventory value Red Corp. will report for Item C?

Question 3 options:

	$260
	$275
	$160
	$300

Answer rating: 100% (QA)

Red corp value NRV is using Lower of lost or Net R... View the full answer