Question

Presented below is information related to Rembrandt Inc.’s 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

(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

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

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