Almaden Hardware Store sells two distinct types of products, tools and paint pro

Question

     

Almaden Hardware Store sells two distinct types of products, tools and paint products. Information pertaining to its 2016 year-end inventory is as follows:

Determine the book value of inventory at year-end, assuming the lower of cost and net realizable value rule is applied to (a) individual products, (b) product type, and (c) total inventory.

       

Assuming that the company reports an inventory write-down as a line item in the income statement, for each of the lower of cost and net realizable value applications determine the amount of the loss.

     

Explanation / Answer

1.

2. Loss will be $580, refer below table

Inventory,
by Product Type Quantity
(A) Per Unit
Cost $
(B) NRV $
(C) Lower of cost
or NRV
(D) Book Value
(A X D) Tools:        Hammers 110 4.40 4.90 4.40 484        Saws 140 9.40 8.40 8.40 1176        Screwdrivers 240 1.40 2.00 1.40 336        Total for Tools 1996 Paint products:        1-gallon cans 440 5.40 4.40 4.40 1936        Paint brushes 110 3.40 3.90 3.40 374        Total for Paint 2310        Total Inventory 4306

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.