Question

Tan Company is preparing the annual financial statements dated December 31 of the current year. Ending inventory Information about the five major items stocked for regular sale follows: Quantity on Hand ENDING INVENTORY, CURRENT YEAR Net Realizable Unit Cost When Value (Market) Acquired (FIFO) at Year-End $ 13 $ 16 41 31 Item 62 Required: Compute the valuation that should be used for the current year ending inventory using lower of cost or net realizable value applied on an item-by-item basis. Total Net Quantity Total Cost Realizable Value Lower of Cost or NRY Item 62 92 22 82 362 Total

Answer 1

Step-by-step explanation:

Item Quantity Total Cost* Total Net realizable value Lower of cost

or NRV

A 62 $806.00 $992.00 $ 806.00

B 92 $ 3,772.00 $ 2,852.00 $ 2,852.00

C 22 $ 1,166.00 $ 1,078.00 $ 1,078.00

D 82 $2,542.00 $ 2,132.00 $ 2,132.00

E 362 $2,172.00 $3,982.00 $ 2,172.00

Total $10,458.00 $ 11,036.00 $ 9,040.00

*Cost per unit x Total quantity

**NRV per unit x Total quantity