Following is data relative to the 12/31/2021 inventory of Brown Company: Original Cost Per Unit $65...

 

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Following is data relative to the 12/31/2021 inventory of Brown Company: Original Cost Per Unit $65 45 95 75 90 $370 Item A B C D E S Selling price is $90/unit for items A, B, and C and $80/unit for items D and E. Disposal costs amount to 10% of selling price and a "normal" profit is 30% of selling price. Required: a. Using the lower-of-cost-or-net realizable value (LCNRV) approach applied on an individual- item basis, complete the last two columns in the 12/31/2021 schedule above. The NRV for item A is given as an example. NRV $81 b. Prepare the journal entries necessary at 12/31/2021 based on the data above using either Loss method or COGS method. Item A B C D E c. Using the lower-of-cost-or-market (LCM) approach applied on an individual-item basis, complete the last four columns in the 12/31/2021 schedule below. The ceiling and floor for item A are given as an example. Original Cost Per Unit $65 45 95 75 90 $370 Replacement Cost $ 45 40 75 65 95 Appropriate Inventory Value Ceiling $ 81 Floor $54 Designated Market Value Appropriate Inventory Value Following is data relative to the 12/31/2021 inventory of Brown Company: Original Cost Per Unit $65 45 95 75 90 $370 Item A B C D E S Selling price is $90/unit for items A, B, and C and $80/unit for items D and E. Disposal costs amount to 10% of selling price and a "normal" profit is 30% of selling price. Required: a. Using the lower-of-cost-or-net realizable value (LCNRV) approach applied on an individual- item basis, complete the last two columns in the 12/31/2021 schedule above. The NRV for item A is given as an example. NRV $81 b. Prepare the journal entries necessary at 12/31/2021 based on the data above using either Loss method or COGS method. Item A B C D E c. Using the lower-of-cost-or-market (LCM) approach applied on an individual-item basis, complete the last four columns in the 12/31/2021 schedule below. The ceiling and floor for item A are given as an example. Original Cost Per Unit $65 45 95 75 90 $370 Replacement Cost $ 45 40 75 65 95 Appropriate Inventory Value Ceiling $ 81 Floor $54 Designated Market Value Appropriate Inventory Value

Answer rating: 100% (QA)

a Using the lowerofcostornet realizable value LCNRV approach applied on an individualitem basis compare the original cost per unit with the net realizable value NRV to determine the appropriate invent... View the full answer