In applying the lower of cost and net realizable value rule, by how much would Used Motorcycle need to adjust its inventory
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Used Motorcycles Inc. has the following inventory of motorcycles:
Cost NRV
Model A $ 15,000 $ 15,500
Model B 25,000 22,000
Model C 17,000 19,000
In applying the lower of cost and net realizable value rule, by how much would Used Motorcycle need to adjust its inventory?
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- Sienna Company uses the FIFO cost flow assumption. Sierra has inventory with a selling price of 100, packaging costs of 5, and transportation costs of 10. Siennas normal profit margin is 20. However, due to limited supply of the product from the manufacturer, it would cost Sienna 80 to replace the inventory. What amount should be used as the market value? a. 65 b. 80 c. 85 d. 100Kulsrud Company would like to estimate the current inventory level. Using the gross profit method and the following information, estimate the current inventory level for Kulsrud Company. Goods available for sale 100,000 Net sales 150,000 Normal gross profit as a percent of sales 40%Herman Company has three products in its ending inventory. Specific per unit data at the end of the year for each of the products are as follows: Product 1 Product 2 Product 3 Cost $ 20 $ 90 $ 50 Selling price 40 120 70 Costs to sell 6 40 10 Required:What unit values should Herman use for each of its products when applying the lower of cost or net realizable value (LCNRV) rule to ending inventory? Product Cost NRV Per Unit Inventory Value 1 2 3
- If the company had used the FIFO inventory costing method, cost of goods sold under FIFO would have been $ 10,200.00. Management wants a report that shows how changing from FIFO to another method would change net income. Prepare a table showing (1) the amount by which cost of goods sold under LIFO and AVCO is different from the FIFO cost of goods sold and ( 2) the effect on net income when LIFO and AVCO are used instead of FIFO. When costs are rising, what is the effect of the FIFO inventory valuation approach on cost of goods sold, gross profit and net income? Why?Ivanhoe Inc. has the following information related to an item in its ending inventory. Packit (Product # 874) has a cost of $93, a replacement cost of $81, a net realizable value of $87, and a normal profit margin of $5. What is the final lower-of-cost-or-market inventory value for Packit? $82. $87. $93. $81.Presented below is information related to Rembrandt Inc.’s inventory. (per unit) Skis Boots Parkas Historical cost $190.00 $106.00 $53.00 Selling price 212.00 145.00 73.75 Cost to sell 19.00 8.00 2.50 Cost to complete 32.00 29.00 21.25 Determine the following: the net realizable value for each item, and the carrying value of each item under LCNRV.
- Presented below is information related to Tamarisk Inc.’s inventory. (per unit) Skis Boots Parkas Historical cost $342.00 $190.80 $95.40 Selling price 381.60 261.00 132.75 Cost to sell 34.20 14.40 4.50 Cost to complete 57.60 52.20 38.25 Determine the following: the net realizable value for each item, and the carrying value of each item under LCNRV. Item Cost NRV LCNRV Skits Boots ParkasHerman Company has three products in its ending inventory. Specific per unit data at the end of the year for each of the products are as follows: Product 1 Product 2 Product 3 Cost $ 20 $ 90 $ 50 Replacement cost 18 85 40 Selling price 40 120 70 Selling costs 6 40 10 Normal profit 5 30 12 Required:What unit values should Herman use for each of its products when applying the lower of cost or market (LCM) rule to ending inventory? Product Cost Replacement cost NRV NRV - NP Market Per Unit Inventory Value 1 $20 $18 2 90 85 3 50 40The following information pertains to one item of inventory of the Simon Company: Per unit Cost $ 200 Replacement cost 170 Selling price 190 Disposal costs 10 Normal profit margin 30 Using the lower of cost or market method, this item should be valued at: Group of answer choices $200 $170 $150 $190
- Poe, Co. uses LIFO for its inventory valuation. The original cost of Item #BB-8, the only inventory item of Poe, was $12,000. The current selling price and replacement cost are $13,500 and $9,500, respectively. Costs to sell are estimated to be $2,700. The normal profit margin is 10% of the original cost.Ross Electronics has one product in its ending inventory. Per unit data consist of the following: cost, $20; replacement cost, $18; selling price, $30; selling costs, $4. The normal profit is 30% of selling price.What unit value should Ross use when applying the lower of cost or market (LCM) rule to ending inventory?Presented below is information related to Rembrandt Inc.’s inventory. 000(per unit)000 00Skis00 0Boots0 Parkas Historical cost $190.00 $106.00 $53.00 Selling price 212.00 145.00 73.75 Cost to sell 19.00 8.00 2.50 Cost to complete 32.00 29.00 21.25 Determine the following: (a) the net realizable value for each item, and (b) the carrying value of each item under LCNRV.
