Problem 9-1 Blossom Company manufactures desks. Most of the company’s desks are

Question

Problem 9-1

Blossom Company manufactures desks. Most of the company’s desks are standard models and are sold on the basis of catalog prices. At December 31, 2017, the following finished desks (10 desks in each category) appear in the company’s inventory.

Finished Desks

A

B

C

D

The 2017 catalog was in effect through November 2017, and the 2018 catalog is effective as of December 1; catalog prices are net of the usual discounts.

At what amount should each of the four desks appear in the company’s December 31, 2017, inventory, assuming that the company has adopted a lower-of-FIFO-cost-or-net realizable value (LCNRV) approach for valuation of inventories on an individual-item basis?

Finished Desks

A

B

C

D

2017 catalog selling price $655 $698 $1,310 $1,528 FIFO cost per inventory list 12/31/17 684 655 1,208 1,397 Estimated cost to complete and sell 73 87 116 189 2018 catalog selling price 728 786 1,310 1,746

Explanation / Answer

Finished Desks A B C D
2017 catalog selling price $655 $698 $1,310 $1,528

FIFO cost per inventory list 12/31/17 684 655 1,208 1,397
Estimated cost to complete and sell 73 87 116 189
TOTAL PRICE AS PER FIFO …..(1) 757 742 1324 1586

2018 catalog selling price….. (2) 728 786 1,310 1,746

AMOUNT TO APPEAR AS ON 31ST Dec'17 WHICH EVER IS LOWER (Between (1) & (2)) 728 742 1,310 1586

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