GEN COMBO LOOSELEAF INTERMEDIATE ACCOUNTING; CONNECT ACCESS CARD
9th Edition
ISBN: 9781260089042
Author: J. David Spiceland
Publisher: McGraw-Hill Education
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Chapter 9, Problem 9.3E
Lower of cost or net realizable value
• LO9–1
Tatum Company has four products in its inventory. Information about the December 31, 2018, 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, 2018, 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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Exercise 9-6 (Algo) Lower of cost or market [LO9-1]
Tatum Company has four products in its inventory. Information about the December 31, 2021, inventory is as follows:
Total
Total Net
Product
Total Cost
Replacement Cost
$118,100
91,000
42,800
30,200
Realizable Value
$129,000
96,400
64,200
32,300
$107,300
117,800
53,700
54,000
101
102
103
104
The normal profit is 30% of total cost.
Required:
1. Determine the carrying value of inventory at December 31, 2021, assuming the lower of cost or market (LCM) rule is applied to
individual products.
2. Assuming that inventory write-downs are common for Tatum Company, record any necessary year-end adjusting entry.
X Answer is complete but not entirely correct.
Complete this question by entering your answers in the tabs below.
Required 1
Required 2
Determine the carrying value of inventory at December 31, 2021, assuming the lower of cost or market (LCM) rule is applied to
individual products.
Inventory
Value
Replacement
NRV
NRV - NP
Market
Product…
Product
Total Cost
101
$ 150,000
102
105,000
103
104
75,000
45,000
Total Net Realizable
Value
$ 115,000
125,000
65,000
65,000
Required:
1. Determine the carrying value of ending inventory 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 adjusting entry.
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Determine the carrying value of ending inventory assuming the lower of cost or net realizable value (LCNRV) rule is applied to
individual products.
Product
Cost
NRV
Inventory
Value
101
$
150,000 $
115,000
102
105,000
125,000
103
75,000
65,000
104
45,000
65,000
$
375,000
$
0
3
A company has four products in its inventory. Information about ending inventory is as follows:
Total Net
Realizable Value.
Product
101
102
103
104
Total Cost
$ 136,000
99,000
68,000
38,000
Required:
1. Determine the carrying value of ending inventory 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 the company, record any necessary year-end adjusting entry.
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Product
Determine the carrying value of ending inventory assuming the lower of cost or net realizable value (LCNRV) rule is applied to
individual products.
101
102
103
104
$ 108,000
118,000
58,000
58,000
Cost
$ 136,000 $
99,000
68,000
38,000
341,000
$
NRV
108,000
118,000
58,000
58,000
Inventory
Value
$
0
Chapter 9 Solutions
GEN COMBO LOOSELEAF INTERMEDIATE ACCOUNTING; CONNECT ACCESS CARD
Ch. 9 - Explain the (a) lower of cost or net realizable...Ch. 9 - What are the various levels of aggregation to...Ch. 9 - Describe the alternative approaches for recording...Ch. 9 - Explain the gross profit method of estimating...Ch. 9 - The Rider Company uses the gross profit method to...Ch. 9 - Explain the retail inventory method of estimating...Ch. 9 - Both the gross profit method and the retail...Ch. 9 - Define each of the following retail terms: initial...Ch. 9 - Explain how to estimate the average cost of...Ch. 9 - Prob. 9.10Q
Ch. 9 - Explain the LIFO retail inventory method.Ch. 9 - Discuss the treatment of freight-in, net markups,...Ch. 9 - Explain the difference between the retail...Ch. 9 - Prob. 9.14QCh. 9 - Prob. 9.15QCh. 9 - Explain the accounting treatment of material...Ch. 9 - It is discovered in 2018 that ending inventory in...Ch. 9 - Identify any differences between U.S. GAAP and...Ch. 9 - (Based on Appendix 9) Define purchase commitments....Ch. 9 - (Based on Appendix 9) Explain how purchase...Ch. 9 - Lower of cost or net realizable value LO91 Ross...Ch. 9 - Lower of cost or net realizable value LO91 SLR...Ch. 9 - Lower of cost or market LO91 [This is a variation...Ch. 9 - Lower of cost or market LO91 [This is a variation...Ch. 9 - Prob. 9.5BECh. 9 - Gross profit method; solving for unknown LO92...Ch. 9 - Retail inventory method; average cost LO93 Kiddie...Ch. 9 - Retail inventory method; LIFO LO93 Refer to the...Ch. 9 - Conventional retail method LO94 Refer to the...Ch. 9 - Conventional retail method LO94 Roberson...Ch. 9 - Dollar-value LIFO retail LO95 On January 1, 2018,...Ch. 9 - Dollar-value LIFO retail LO95 This exercise is a...Ch. 9 - Change i n inventory costing methods LO96 In...Ch. 9 - Change in inventory costing methods LO96 In 2018,...Ch. 9 - Inventory error LO97 In 2018, Winslow...Ch. 9 - Inventory error LO97 Refer to the situation...Ch. 9 - Lower of cost or net realizable value LO91 Herman...Ch. 9 - Lower of cost or net realizable value LO91 The...Ch. 9 - Lower of cost or net realizable value LO91 Tatum...Ch. 9 - Lower of cost or market LO91 [This is a variation...Ch. 9 - Lower of cost or market LO91 [This is a variation...Ch. 9 - Lower of cost or market LO91 [This is a variation...Ch. 9 - Prob. 9.8ECh. 9 - Prob. 9.9ECh. 9 - Prob. 9.10ECh. 9 - Gross profit method LO92 Royal Gorge Company uses...Ch. 9 - Prob. 9.12ECh. 9 - Retail inventory method; average cost LO93 San...Ch. 9 - Prob. 9.14ECh. 9 - Retail inventory method; LIFO LO93 Crosby Company...Ch. 9 - Prob. 9.16ECh. 9 - Conventional retail method; employee discounts ...Ch. 9 - Retail inventory method; solving for unknowns ...Ch. 9 - Dollar-value LIFO retail LO95 On January 1, 2018,...Ch. 9 - Prob. 9.20ECh. 9 - Dollar-value LIFO retail LO95 Lance-Hefner...Ch. 9 - Prob. 9.22ECh. 9 - Change in inventory costing methods LO96 In 2018,...Ch. 9 - Prob. 9.24ECh. 9 - Error correction; inventory error LO97 During...Ch. 9 - Prob. 9.26ECh. 9 - Inventory error LO97 In 2018, the internal...Ch. 9 - Inventory errors LO97 In 2018, the controller of...Ch. 9 - Concepts; terminology LO91 through LO97 Listed...Ch. 9 - Prob. 9.30ECh. 9 - Prob. 9.31ECh. 9 - Lower of cost or net realizable value LO91 Decker...Ch. 9 - Prob. 9.2PCh. 9 - Lower of cost or market LO91 Forester Company has...Ch. 9 - Prob. 9.4PCh. 9 - Prob. 9.5PCh. 9 - Prob. 9.6PCh. 9 - Retail inventory method; conventional and LIFO ...Ch. 9 - Prob. 9.8PCh. 9 - Prob. 9.9PCh. 9 - Dollar-value LIFO retail method LO95 [This is a...Ch. 9 - Dollar-value LIFO retail LO95 On January 1, 2018,...Ch. 9 - Retail inventory method; various applications ...Ch. 9 - Retail inventory method; various applications ...Ch. 9 - Prob. 9.14PCh. 9 - Inventory errors LO97 You have been hired as the...Ch. 9 - Inventory errors LO97 The December 31, 2018,...Ch. 9 - Integrating problem; Chapters 8 and 9; inventory...Ch. 9 - Purchase commitments Appendix In November 2018,...Ch. 9 - Judgment Case 91 Inventoriable costs; lower of...Ch. 9 - Integrating Case 93 FIFO and lower of cost or net...Ch. 9 - Prob. 9.4BYPCh. 9 - Prob. 9.5BYPCh. 9 - Prob. 9.6BYPCh. 9 - Prob. 9.7BYPCh. 9 - Real World Case 98 Various inventory issues;...Ch. 9 - Prob. 9.9BYPCh. 9 - Judgment Case 910 Inventory errors LO97 Some...Ch. 9 - Ethics Case 911 Overstatement of ending inventory ...Ch. 9 - Analysis Case 912 Purchase commitments Appendix...Ch. 9 - Continuing Cases Target Case LO93, LO94, LO95...Ch. 9 - Prob. 1CCIFRS
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