Teal Company uses the LCNRV method, on an individual-item basis, in pricing its
ID: 2580991 • Letter: T
Question
Teal Company uses the LCNRV method, on an individual-item basis, in pricing its inventory items. The inventory at December 31, 2017, consists of products D, E, F, G, H, and I. Relevant per unit data for these products appear below.
Item D
Item E
Item F
Item G
Item H
Item I
Using the LCNRV rule, determine the proper unit value for balance sheet reporting purposes at December 31, 2017, for each of the inventory items above.
Item D
Item E
Item F
Item G
Item H
Item I
Estimated selling price $122 $112 $97 $92 $112 $92 Cost 77 82 82 82 51 37 Cost to complete 31 31 26 36 31 31 Selling costs 10 18 10 20 10 20Explanation / Answer
Cost ($) NRV ($) = Estimated selling price - Cost to complete - Selling costs LCNRV($) Item D 77 122 - 31 - 10 = 81 77 Item E 82 112-31-18 = 63 63 Item F 82 97-26-10 = 61 61 Item G 82 92-36-20 = 36 36 Item H 51 112 - 31 - 10 = 71 51 Item I 37 92-31-20 = 41 37
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