Question

Hagger Sounds has accumulated the cost and net realizable value data on March 31: Cost Net Realizable Value iPods $20,400 Cell phones $24,000 18,000 28,000 19,000 25,600 DVDs Using the lower-of-cost-or-net realizable value, how much is the value of the ending inventory? (Apply LCNRV to each category) $64,000 $65,000 $70,000 $71,000

Answer 1

Then, we add up the LCNRV for each category to get the value of the ending inventory. he value of the ending inventory using the LCNRV method is $44,400.

Step-by-step explanation:

To calculate the value of the ending inventory using the lower-of-cost-or-net realizable value (LCNRV) method, we compare the cost and net realizable value for each category of products. In this case, we have two categories: iPods and Cell phones. For iPods, the cost is $20,400 and the net realizable value is $28,000. For Cell phones, the cost is $24,000 and the net realizable value is $25,600.

Based on the LCNRV method, we choose the lower value between the cost and net realizable value for each category. Therefore, for iPods, the LCNRV is $20,400 and for Cell phones, the LCNRV is $24,000.

To find the value of the ending inventory, we add up the LCNRV for each category: $20,400 + $24,000 = $44,400.

So, the value of the ending inventory using the LCNRV method is $44,400.

Answer 2

To calculate the ending inventory value using the LCNRV method, we choose the lower value between the cost and net realizable value for each product category. The ending inventory is the sum of these values, which equals $61,000.

Step-by-step explanation:

The student has asked how to calculate the value of the ending inventory using the lower-of-cost-or-net realizable value (LCNRV) method when each product category is evaluated separately.

Here's how we compute the LCNRV for each category:

• iPods: Lower value between cost ($20,400) and net realizable value ($18,000) is $18,000.
• Cell phones: Lower value between cost ($24,000) and net realizable value ($28,000) is $24,000.
• DVDs: Lower value between cost ($19,000) and net realizable value ($25,600) is $19,000.

Adding up these amounts, the ending inventory value comes to $18,000 (iPods) + $24,000 (Cell phones) + $19,000 (DVDs) = $61,000. Therefore, the value of the ending inventory using the LCNRV method is $61,000.