Intermediate Accounting
9th Edition
ISBN: 9781259722660
Author: J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher: McGraw-Hill Education
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Textbook Question
Chapter 9, Problem 9.2E
Lower of cost or net realizable value
• LO9–1
The inventory of Royal Decking consisted of five products. Information about the December 31, 2018, inventory is as follows:
| Per Unit | ||
| Product Cost | Selling Price | |
| A | $ 40 | $ 60 |
| B | 80 | 100 |
| C | 40 | 80 |
| D | 100 | 130 |
| E | 20 | 30 |
Costs to sell consist of a sales commission equal to 10% of selling price and shipping costs equal to 5% of cost.
Required:
What unit value should Royal Decking use for each of its products when applying the lower of cost or net realizable value (LCNRV) rule to units of ending inventory?
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Chapter 9 Solutions
Intermediate Accounting
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