T2T Hockey Inc. has the largest selection of hockey equipment of any retailer in the city in which it operates. T2T reported the following cost and net realizable value information for inventory at December 31:

Required

a. Calculate the ending inventory balance for hockey sticks and helmets using the lower of cost and net realizable value for each item.

b. Calculate the ending inventory balance for hockey sticks and helmets using the historical unit costs provided.

c. Compare the difference in the ending inventory amounts. Which amount provides a more faithful representation of the inventory value? Explain.

Transcribed Image Text:

Item Units Unit Cost Unit NRV Hockey sticks: $ 95 $200 Bauer 23 $150 $250 ССм 13 $200 Warrior 57 $250 Helmets: Adidas 11 $190 $125 Nike 10 $175 $175 Mission 25 $75 $200