need help with question 2. (LCM).

Intermediate Accounting.

B D u w $ The following table displays the cost and net realizable value of the various items in Oceania Seafoods' inventory. As always, the company has the option of determining the net realizable value of inventory as the value of: inventory as a whole, the sum of the individual items, or the sum of its two major categories of inventory. Please complete the table to determine the net realizable value of the company's inventory for each of these three different options. 3 4 NRV Items Individual Cost Major (inventory as a Categories Items 6 whole) 7 Cod: 8 Alaska Cod 82,000 $ 75,000 75,000 9 Pacific Snapper 61,000 65,000 61,000 10 Sablefish 20,000 18,000 158,000 18,000 11 Total Cod 12 Shellfish: 13 Crab 163,000 $ 168,000 163,000 14 Prawns 36,000 37,000 36,000 15 Total Shellfish 199,000 205,000 199,000 16 Total Inventory $ 362,000 $ 363,000 $ 357,000 $ 353,000 17 18 Part Two if Oceania Seafood wanted maximize its reported assets yet still adhere to the LCNRV rule, what inventory value should Oceania Seafoods report on its year-end balance 19 sheet? 20 21 Inventory Value = $362000 22 If instead, Oceania wanted to minimize its tax liability, what value of inventory would 23 Oceania report? 24 $ 25 Tax Liability = $353000 LGNRV LCM Retail Gross Profit 2 Part One Ryan Ray Cookware, Inc. has unfinished woks in its inventory with a sales value of $60,000. The company estimates that it will have to spend $12,000 to complete production of these woks. Historically, Ryan Ray Cookware, Inc. has had a normal profit margin of 25%. For the purposes of designating a market value, 3 compute the ceiling and floor prices for these woks. 4 5 Estimated Allowance for Inventory at Sales Value Ceiling Floor 6 Completion Costs Normal Profit 7 $ 60,000 12,000 48,000 15,000 33,000 8 9 Part Two 10 Determine the designated market value for the following five items in Ryan Ray Cookware's Inc: 11 12 Designated Inventory Item Replacement Cost Ceiling Floor 13 Market Value 14 Pans: 15 Woks $ 45,000 16 Frying Pans 87,000 80,000 60,000 17 Roasting Pans 72,000 82,000 65,600 18 Pots: 19 Stock Pots 100,000 96,000 76,800 20 Dutch Oven 36,000 50,000 40,000 21 22 Part Three Determine the lower-of-cost or market value for Ryan Ray Cookware using the three approved methods: 23 inventory as a whole, the sum of individual items, and the sum of the inventory's major categories. PA LCNRV LCM Retail Gross Profit Replacement Cost Ceiling Floor Designated Market Value $ Inventory Item 3 Pans: 5 Woks 5 Frying Pans 7 Roasting Pans 3 Pots: Stock Pots Dutch Oven 1 2 45,000 87,000 72,000 80,000 82,000 60,000 65,600 100,000 36,000 96,000 50,000 76,800 40,000 Part Three Determine the lower-of-cost-or market value for Ryan Ray Cookware using the three approved methods: 3 inventory as a whole, the sum of individual items, and the sum of the inventory's major categories. 4 Designated Market Inventory Item 5 Historical Cost Major Individual Items Value Categories C6 Pans: 7 Woks $ 42,000 8 Frying Pans 82,000 =9 Roasting Pans 75,000 50 Total Pans 199,000 31 Pots: 32 Stock Pots 96,000 33 Dutch Oven 44,000 34 Total Pots 140,000 35 Total Inventory $ 339,000 36 LCNRV LCM Retail Gross Profit Ready Type here to search B D u w $ The following table displays the cost and net realizable value of the various items in Oceania Seafoods' inventory. As always, the company has the option of determining the net realizable value of inventory as the value of: inventory as a whole, the sum of the individual items, or the sum of its two major categories of inventory. Please complete the table to determine the net realizable value of the company's inventory for each of these three different options. 3 4 NRV Items Individual Cost Major (inventory as a Categories Items 6 whole) 7 Cod: 8 Alaska Cod 82,000 $ 75,000 75,000 9 Pacific Snapper 61,000 65,000 61,000 10 Sablefish 20,000 18,000 158,000 18,000 11 Total Cod 12 Shellfish: 13 Crab 163,000 $ 168,000 163,000 14 Prawns 36,000 37,000 36,000 15 Total Shellfish 199,000 205,000 199,000 16 Total Inventory $ 362,000 $ 363,000 $ 357,000 $ 353,000 17 18 Part Two if Oceania Seafood wanted maximize its reported assets yet still adhere to the LCNRV rule, what inventory value should Oceania Seafoods report on its year-end balance 19 sheet? 20 21 Inventory Value = $362000 22 If instead, Oceania wanted to minimize its tax liability, what value of inventory would 23 Oceania report? 24 $ 25 Tax Liability = $353000 LGNRV LCM Retail Gross Profit 2 Part One Ryan Ray Cookware, Inc. has unfinished woks in its inventory with a sales value of $60,000. The company estimates that it will have to spend $12,000 to complete production of these woks. Historically, Ryan Ray Cookware, Inc. has had a normal profit margin of 25%. For the purposes of designating a market value, 3 compute the ceiling and floor prices for these woks. 4 5 Estimated Allowance for Inventory at Sales Value Ceiling Floor 6 Completion Costs Normal Profit 7 $ 60,000 12,000 48,000 15,000 33,000 8 9 Part Two 10 Determine the designated market value for the following five items in Ryan Ray Cookware's Inc: 11 12 Designated Inventory Item Replacement Cost Ceiling Floor 13 Market Value 14 Pans: 15 Woks $ 45,000 16 Frying Pans 87,000 80,000 60,000 17 Roasting Pans 72,000 82,000 65,600 18 Pots: 19 Stock Pots 100,000 96,000 76,800 20 Dutch Oven 36,000 50,000 40,000 21 22 Part Three Determine the lower-of-cost or market value for Ryan Ray Cookware using the three approved methods: 23 inventory as a whole, the sum of individual items, and the sum of the inventory's major categories. PA LCNRV LCM Retail Gross Profit Replacement Cost Ceiling Floor Designated Market Value $ Inventory Item 3 Pans: 5 Woks 5 Frying Pans 7 Roasting Pans 3 Pots: Stock Pots Dutch Oven 1 2 45,000 87,000 72,000 80,000 82,000 60,000 65,600 100,000 36,000 96,000 50,000 76,800 40,000 Part Three Determine the lower-of-cost-or market value for Ryan Ray Cookware using the three approved methods: 3 inventory as a whole, the sum of individual items, and the sum of the inventory's major categories. 4 Designated Market Inventory Item 5 Historical Cost Major Individual Items Value Categories C6 Pans: 7 Woks $ 42,000 8 Frying Pans 82,000 =9 Roasting Pans 75,000 50 Total Pans 199,000 31 Pots: 32 Stock Pots 96,000 33 Dutch Oven 44,000 34 Total Pots 140,000 35 Total Inventory $ 339,000 36 LCNRV LCM Retail Gross Profit Ready Type here to search