The inventory of Grouper Company on December 31, 2017, consists of the following
ID: 2558807 • Letter: T
Question
The inventory of Grouper Company on December 31, 2017, consists of the following items Part Quantity 110 Cost per Unit Net Realizable Value 112 113 120 121a 122 540 930 470 180 420 1,700 270 $130 82 110 233 281 $137 71 104 247 285 329 322 a Part No. 121 is obsolete and has a realizable value of $1 each as scrap.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 Inventory as of December 31, 2017 (b) Determine the inventory by the LCNRV method, applying the method to the total of the inventory Inventory as of December 31, 2017Explanation / Answer
Answer
Part
Cost per unit (A)
Net Realizable Value (B)
Lower of Cost or NRV = D (Lower of A or B)
Quantity (C)
Inventory as of Dec 31, 2017 ( C x D)
110
$ 130.00
$ 137.00
$ 130.00
540
$ 70,200.00
111
$ 82.00
$ 71.00
$ 71.00
930
$ 66,030.00
112
$ 110.00
$ 104.00
$ 104.00
470
$ 48,880.00
113
$ 233.00
$ 247.00
$ 233.00
180
$ 41,940.00
120
$ 281.00
$ 285.00
$ 281.00
420
$ 1,18,020.00
121
$ 22.00
$ 1.00
$ 1.00
1700
$ 1,700.00
122
$ 329.00
$ 322.00
$ 322.00
270
$ 86,940.00
TOTAL
4510
$ 4,33,710.00
Inventory as of Dec 31, 2017 will be $433,710.00
Part
Quantity (A)
Cost per Unit (B)
Inventory at Cost (A x B)
Net Realizable Value (C)
Inventory at NRV (A x C)
110
540
$ 130.00
$ 70,200.00
$ 137.00
$ 73,980.00
111
930
$ 82.00
$ 76,260.00
$ 71.00
$ 66,030.00
112
470
$ 110.00
$ 51,700.00
$ 104.00
$ 48,880.00
113
180
$ 233.00
$ 41,940.00
$ 247.00
$ 44,460.00
120
420
$ 281.00
$ 1,18,020.00
$ 285.00
$ 1,19,700.00
121
1700
$ 22.00
$ 37,400.00
$ 1.00
$ 1,700.00
122
270
$ 329.00
$ 88,830.00
$ 322.00
$ 86,940.00
TOTAL
4510
$ 4,84,350.00
$ 4,41,690.00
Inventory as of Dec 31, 2017 will be LOWER of Inventory at COST or Inventory at NRV, hence, Value of 31 Dec 2017 Inventory will be $441,690.00
Part
Cost per unit (A)
Net Realizable Value (B)
Lower of Cost or NRV = D (Lower of A or B)
Quantity (C)
Inventory as of Dec 31, 2017 ( C x D)
110
$ 130.00
$ 137.00
$ 130.00
540
$ 70,200.00
111
$ 82.00
$ 71.00
$ 71.00
930
$ 66,030.00
112
$ 110.00
$ 104.00
$ 104.00
470
$ 48,880.00
113
$ 233.00
$ 247.00
$ 233.00
180
$ 41,940.00
120
$ 281.00
$ 285.00
$ 281.00
420
$ 1,18,020.00
121
$ 22.00
$ 1.00
$ 1.00
1700
$ 1,700.00
122
$ 329.00
$ 322.00
$ 322.00
270
$ 86,940.00
TOTAL
4510
$ 4,33,710.00
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