Question

Question:In some instances, accounting principles require a departure from valuing inventories at cost alone. Determine the proper unit inventory price in the following cases using LCNRV. Cases 1 2 3 4 5 Cost \(15.90 \)16.10 \(15.90 \)15.90 $15.90 Sales value 14.80 19.20 15.20 10.40 17.80 Estimated cost to complete 1.50 1.90 1.65 .80 1.00 Estimated cost to sell .50 .70 .55 .40 .60

Short answer

Question:In some instances, accounting principles require a departure from valuing inventories at cost alone. Determine the proper unit inventory price in the following cases using LCNRV. Cases 1 2 3 4 5 Cost $15.90 $16.10 $15.90 $15.90 $15.90 Sales value 14.80 19.20 15.20 10.40 17.80 Estimated cost to complete 1.50 1.90 1.65 .80 1.00 Estimated cost to sell .50 .70 .55 .40 .60

Step-by-step solution

Step-by-step-solutionStep1:

The net realizable value for each caseis calculated as follows:

	Case 1	Case 2	Case 3	Case 4	Case 5
Sales Value	$14.80	$19.20	$15.20	$10.40	$17.80
Less: Estimated cost to complete	1.50	1.90	1.65	0.80	1.00
Less: Estimated cost to sell	0.50	0.70	0.55	0.40	0.60
Net realizable value	$12.80	$16.60	$13.00	$9.20	$16.20

Step 2:

The value of inventories for each case as per the LCNRV method is shown as follows:

	Case 1	Case 2	Case 3	Case 4	Case 5
Cost	$15.90	$16.10	$15.90	$15.90	$15.90
Net realizable value	12.80	16.60	13.00	9.20	16.20
LCNRV	$12.80	$16.10	$13.00	$9.20	$15.90