Valuing Inventory Using Lower-of-Cost-or-Net Realizable ValuePrinter Inc. discloses the following ending inventory data.ClassificationQuantityCost per UnitNRV per UnitPaperStock X400$300$330Stock Y120250230InkStock D40$70$65Stock E205562TonerStock A16$75$70Stock B89580Stock C14100110 a. Determine the valuation of inventory at cost and at the lower-of-cost-or-net realizable value assuming application by (a) individual items, (b) classifications, and (c) total inventory. The unit costs of the three categories are significantly different; however, within each category the unit costs are similar.1. Calculate the lower of cost or net realizable value applying the rule to each individual item.Answer2. Calculate the lower of cost or net realizable value applying the rule by inventory category.Answer3. Calculate the lower of cost or net realizable value applying the rule to total inventory.Answer b. Prepare the entry to record the ending inventory for each approach in part a assuming any inventory holding loss is recognized as a separate loss and reduces inventory through an allowance account.Note: If a journal entry isn't required for the transaction, select "N/A" as the account names and leave the Dr. and Cr. answers blank (zero). Ref.Account NameDr.Cr.1AnswerAnswerAnswer AnswerAnswerAnswer2AnswerAnswerAnswer AnswerAnswerAnswer3AnswerAnswerAnswer AnswerAnswerAnswer

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Description: Valuing Inventory Using Lower-of-Cost-or-Net Realizable ValuePrinter Inc. discloses the following ending inventory data.ClassificationQuantityCost per UnitNRV per UnitPaperStock X400$300$330Stock Y120250230InkStock D40$70$65Stock E205562TonerStock A1

Answered: Valuing Inventory Using…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter8: Inventories: Special Valuation Issues

Section: Chapter Questions

Problem 13E: Retail Inventory Method The following information relates to the retail inventory method used by...

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Valuing Inventory Using Lower-of-Cost-or-Net Realizable Value

Printer Inc. discloses the following ending inventory data.

Classification	Quantity	Cost per Unit	NRV per Unit
Paper
Stock X	400	$300	$330
Stock Y	120	250	230
Ink
Stock D	40	$70	$65
Stock E	20	55	62
Toner
Stock A	16	$75	$70
Stock B	8	95	80
Stock C	14	100	110

a. Determine the valuation of inventory at cost and at the lower-of-cost-or-net realizable value assuming application by (a) individual items, (b) classifications, and (c) total inventory. The unit costs of the three categories are significantly different; however, within each category the unit costs are similar.

1. Calculate the lower of cost or net realizable value applying the rule to each individual item.	Answer
2. Calculate the lower of cost or net realizable value applying the rule by inventory category.	Answer
3. Calculate the lower of cost or net realizable value applying the rule to total inventory.	Answer

b. Prepare the entry to record the ending inventory for each approach in part a assuming any inventory holding loss is recognized as a separate loss and reduces inventory through an allowance account.

Note: If a journal entry isn't required for the transaction, select "N/A" as the account names and leave the Dr. and Cr. answers blank (zero).

Ref.	Account Name	Dr.	Cr.
1	Answer	Answer	Answer
	Answer	Answer	Answer
2	Answer	Answer	Answer
	Answer	Answer	Answer
3	Answer	Answer	Answer
	Answer	Answer	Answer

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