Exercise 9-1 The inventory of Larkspur Company on December 31, 2017, consists of
ID: 2543767 • Letter: E
Question
Exercise 9-1
The inventory of Larkspur Company on December 31, 2017, consists of the following items.
Part
Quantity
Cost per Unit
Net Realizable Value
a Part No. 121 is obsolete and has a realizable value of $1 each as scrap.
(a) Determine the inventory as of December 31, 2017, by the LCNRV method, applying this method to each item.
(b) Determine the inventory by the LCNRV method, applying the method to the total of the inventory.
Part
Quantity
Cost per Unit
Net Realizable Value
110 660 $138 $145 111 1,030 87 75 112 520 116 110 113 180 247 261 120 370 297 302 121 a 1,700 23 1 122 320 348 341Explanation / Answer
Part
Quantity
Cost/Unit
Net Realizable Value
Total Cost
Total NRV
LCNRV
110
660
$ 138
$ 145
$ 91080
$ 95700
$ 91080
111
1030
87
75
89610
77250
77250
112
520
116
110
60320
57200
57200
113
180
247
261
44460
46980
44460
120
370
297
302
109890
111740
109890
121
1700
23
1
39100
1700
1700
122
320
348
341
111360
109120
109120
TOTAL
$ 545820
$ 499690
$ 490700
a - Inventory as of December 31, 2017, by the LCNRV method, applying this method to each item.= $ 4,90,700
b - Inventory by the LCNRV method, applying the method to the total of the inventory= $ 4,99,690
Part
Quantity
Cost/Unit
Net Realizable Value
Total Cost
Total NRV
LCNRV
110
660
$ 138
$ 145
$ 91080
$ 95700
$ 91080
111
1030
87
75
89610
77250
77250
112
520
116
110
60320
57200
57200
113
180
247
261
44460
46980
44460
120
370
297
302
109890
111740
109890
121
1700
23
1
39100
1700
1700
122
320
348
341
111360
109120
109120
TOTAL
$ 545820
$ 499690
$ 490700
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