The following information is for Lawrence Company, who uses the LIFO method: NRV Minus Net Normal Realizable Replacement Item Cost Profit Value Cost a $ 3.40 $ 2.79 $ 4.14 $ 4.65 b 36.00 28.80 32.40 27.60 c 2.40 1.32 1.56 1.94 d 6.00 5.55 6.15 6.30 e 24.00 20.40 22.80 21.00 f 13.35 10.55 12.30 12.90 Required: 1.) Determine the lower of cost or market for each inventory item. 2.) Now assume instead that the company uses FIFO and the inventory is valued using the LCNRV rule, determine the value of each inventory item.
The following information is for Lawrence Company, who uses the LIFO method: NRV Minus Net Normal Realizable Replacement Item Cost Profit Value Cost a $ 3.40 $ 2.79 $ 4.14 $ 4.65 b 36.00 28.80 32.40 27.60 c 2.40 1.32 1.56 1.94 d 6.00 5.55 6.15 6.30 e 24.00 20.40 22.80 21.00 f 13.35 10.55 12.30 12.90 Required: 1.) Determine the lower of cost or market for each inventory item. 2.) Now assume instead that the company uses FIFO and the inventory is valued using the LCNRV rule, determine the value of each inventory item.
Survey of Accounting (Accounting I)
8th Edition
ISBN:9781305961883
Author:Carl Warren
Publisher:Carl Warren
Chapter11: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 11.18E
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Question
The following information is for Lawrence Company, who uses the LIFO method:
|
|
NRV Minus |
Net |
|
|
|
Normal |
Realizable |
Replacement |
Item |
Cost |
Profit |
Value |
Cost |
a |
$ 3.40 |
$ 2.79 |
$ 4.14 |
$ 4.65 |
b |
36.00 |
28.80 |
32.40 |
27.60 |
c |
2.40 |
1.32 |
1.56 |
1.94 |
d |
6.00 |
5.55 |
6.15 |
6.30 |
e |
24.00 |
20.40 |
22.80 |
21.00 |
f |
13.35 |
10.55 |
12.30 |
12.90 |
Required:
1.) Determine the lower of cost or market for each inventory item.
2.) Now assume instead that the company uses FIFO and the inventory is valued using the LCNRV rule, determine the value of each inventory item.
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