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  3. the following information concerns several of the

The following information concerns several of the inventory items at DC’s: Description Quantity Unit Cost Net Realizable Value Department A: Model DC...

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Accounting

The following information concerns several of the inventoryitems at DC’s:

DescriptionQuantityUnit CostNet Realizable Value
Department A:
Model DC 22574$18.60$17.50
Model DC 3649930.4526.60
Model DC 5138429.7028.20
Department B:
Model AR 1374760.7061.70
Model AR 2265998.7096.65
Model AR 19648126.70124.60



  1. Determine the amount of inventory to be reported on thefinancial statements using the lower of cost or net realizablevalue method of valuation under lower of cost or net realizablevalue for each item separately.
  2. Determine the amount of inventory to be reported on thefinancial statements using the lower of cost or net realizablevalue method of valuation under lower of total cost or total netrealizable value.
  3. Determine the amount of inventory to be reported on thefinancial statements using the lower of cost or net realizablevalue method of valuation under lower of total cost or total netrealizable value by department.

(Do not round your intermediate calculations. Round youranswers to 2 decimal places.)

Answer & Explanation Solved by verified expert
4.1 Ratings (448 Votes)

Correct Answer:

A

B

C =MIN(A,B)

D

E=C*D

Description

Cost per unit

Net Realizable Value

Lower of Cost or NRV

Quantity

Total Amount of Inventory

Department A:

$                        -  

Model DC 225

$ 18.60

$                       17.50

$                 17.50

74

$                            1,295.00

Model DC 364

$ 30.45

$                       30.45

$                 30.45

99

$                            3,014.55

Model DC513

$ 29.70

$                       29.70

$                 29.70

84

$                            2,494.80

Department B:

$                        -  

Model AR 137

$ 60.70

$                       61.70

$                 60.70

47

$                            2,852.90

Model AR 226

$ 98.70

$                       98.70

$                 98.70

59

$                            5,823.30

Model AR196

$ 126.70

$                     126.60

$              126.60

48

$                            6,076.80

End of Answer.

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