Tatum Company has four products in its inventory. Information about the December 31, 2021, inventory is as follows: Product Total Cost Total Net Realizable Value 101 $ 120,000 $ 100,000 102 90,000 110,000 103 60,000 50,000 104 30,000 50,000 Required: 1. Determine the carrying value of inventory at December 31, 2021, assuming the lower of cost or net realizable value (LCNRV) rule is applied to individual products. Product Cost NRV Inventory Value 101 $120,000 $100,000 102 90,000 110,000 103 60,000 50,000 104 30,000 50,000 $300,000 2. Assuming that inventory write-downs are common for Tatum Company, record any necessary year-end adjusting journal entry.
Tatum Company has four products in its inventory. Information about the December 31, 2021, inventory is as follows: Product Total Cost Total Net Realizable Value 101 $ 120,000 $ 100,000 102 90,000 110,000 103 60,000 50,000 104 30,000 50,000 Required: 1. Determine the carrying value of inventory at December 31, 2021, assuming the lower of cost or net realizable value (LCNRV) rule is applied to individual products. Product Cost NRV Inventory Value 101 $120,000 $100,000 102 90,000 110,000 103 60,000 50,000 104 30,000 50,000 $300,000 2. Assuming that inventory write-downs are common for Tatum Company, record any necessary year-end adjusting journal entry.
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter6: Cost Of Goods Sold And Inventory
Section: Chapter Questions
Problem 62E
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Tatum Company has four products in its inventory. Information about the December 31, 2021, inventory is as follows:
| Product | Total Cost | Total Net Realizable Value |
||||
| 101 | $ | 120,000 | $ | 100,000 | ||
| 102 | 90,000 | 110,000 | ||||
| 103 | 60,000 | 50,000 | ||||
| 104 | 30,000 | 50,000 | ||||
Required:
1. Determine the carrying value of inventory at December 31, 2021, assuming the lower of cost or net realizable value (LCNRV) rule is applied to individual products.
|
2. Assuming that inventory write-downs are common for Tatum Company, record any necessary year-end
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