Problem 6-4B Report inventory using lower of cost and net realizable value (LO6-6)

[The following information applies to the questions displayed below.]

A home improvement store, like Lowes, carries the following items:

Required information Problem 6-4B Report inventory using lower of cost and net realizable value (LO6-6) [The following information applies to the questions displayed below.] A home improvement store, like Lowe's, carries the following items: Inventory Items Hammers Saws Screwdrivers Drills 1-gallon paint cans Paintbrushes Quantity Unit Cost 120 $ 7.50 40 10.50 120 2.50 30 25.50 150 6.00 170 6.50 Unit NRV $ 8.00 9.50 3.10 23.00 5.50 7.00 - -- - - - -- - - - - - Screwdrivers Drills 1-gallon paint cans Paintbrushes 120 30 150 170 2.50 25.50 6.00 6.50 3.10 23.00 5.50 7.00 Problem 6-4B Part 1 Required: 1. Compute the total cost of inventory. Total cost Problem 6-4B Part 2 2. Determine whether each inventory item would be reported at cost or net realizable value. Multiply the quantity of each inventory item by the appropriate cost or NRV amount and place the total in the "Lower of Cost and NRV" column. Then determine the total of that column. (Round "Cost per Unit" to 2 decimal places.) Inventory Items Lower of Cost Cost or NRV and NRV per unit Total Hammers Saws Screwdrivers Drills 1-gallon paint cans Paint brushes Total 3. Prepare necessary entry to write down inventory from cost to net realizable value. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet Record the adjustment for inventory. Note: Enter debits before credits. Journal entry worksheet Record the adjustment for inventory. Note: Enter debits before credits. Transaction General Journal Debit Credit Problem 6-4B Part 4 4. The write-down of inventory from cost to market net realizable value reduces total assets and increases total expenses, leading to lower net income and lower retained earnings. True or False True False