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Chapter 9: Question 1BE (page 474)

Presented below is information related to Rembrandt Inc.鈥檚 inventory. (per unit) Skis Boots Parkas Historical cost \(190.00 \)106.00 $53.00 Selling price 212.00 145.00 73.75 Cost to sell 19.00 8.00 2.50 Cost to complete 32.00 29.00 21.25 Determine the following: (a) the net realizable value for each item, and (b) the carrying value of each item under LCN

Short Answer

Expert verified

(a) Net realizable value per unit for Skis, Boots, and Parkas equals $161, $108, and $50, respectively.

(b) Carrying value per unit for Skis, Boots, and Parkas equals $161, $106, and $50, respectively.

Step by step solution

01

Calculate net realizable value for each item

(a) Net realizable value for each item is calculated as follows:

Skis

Boots

Parkas

Selling price

$212

$145

$73.75

Less: Cost to sell

19

8

2.50

Less: Cost to complete

32

29

21.25

Net Realizable Value

$161

$108

$50

02

Calculate carrying value of each item using LCNRV

(b) Carrying value of each item using LCNRV is calculated as follows:

Skis

Boots

Parkas

Historical Cost

$190

$106

$53

Net Realizable Value

161

108

50

Carrying Value as per LCNRV

$161

$106

$50

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Most popular questions from this chapter

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