Question

! Required information (The following information applies to the questions displayed below.) 3 Home Furnishings reports inventory using the lower of cost and net realizable value (NRV). Below is information related to its year-end inventory. Inventory Furniture Electronics Quantity 250 55 Unit Cost $ 90 450 Unit NRV $105 325 ed 2. Calculate ending inventory using the lower of cost and net realizable value. ht Lower of Cost and NRV per unit Ending Inventory ences Inventory Quantity Furniture Electronics $ 0

Answer 1

Value of ending inventory is taken to be lower of its cost and net realisable value

therefore,

Inventory	Quantity	Lower of cost and NRV	Ending inventory
Furniture	250 x $90 = $22500	250 x $105 = $26250	$22500 being the lowest)
Electronic	55 x $450 = $24750	55 x $325 = $17875	$17875 being the lowest)
		Total	$40375