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23 February, 03:33

The inventory of Oheto Company on December 31, 2017, consists of the following items.

Part Quantity Cost per Unit Net Realizable Value

110 600 95 100

111 1000 60 52

112 500 80 76

113 200 170 180

120 400 205 208

121a 1600 16 1

122 300 240 235

a Part No. 121 is obsolete and has a realizable value of $1 each as scrap.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.

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  1. 23 February, 06:06
    0
    a. $335,100

    b. $341,300

    Explanation:

    The computation is shown below:

    (A) (B) (C) (A * B) (A * C)

    Part Quantity Cost per Unit NRV Total cost Total NRV Lower value

    110 600 95 100 $57,000 $60,000 $57,000

    111 1000 60 52 $60,000 $52,000 $52,000

    112 500 80 76 $40,000 $38,000 $38,000

    113 200 170 180 $34,000 $36,000 $34,000

    120 400 205 208 $82,000 $83,200 $82,000

    121a 1600 16 1 $25,600 $1,600 $1,600

    122 300 240 235 $72,000 $70,500 $70,500

    Total $370,600 $341,300 $335,100

    So

    a. Under the LCNRV method, the inventory to each item would be $335,100

    b. The total inventory would be $341,300
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