Question

Exercise 9-2

Ivanhoe Company uses the LCNRV method, on an individual-item basis, in pricing its inventory items. The inventory at December 31, 2017, consists of products D, E, F, G, H, and I. Relevant per unit data for these products appear below.

		Item D			Item E			Item F			Item G			Item H			Item I
Estimated selling price		$144			$132			$114			$108			$132			$108
Cost		90			96			96			96			60			43
Cost to complete		36			36			30			42			36			36
Selling costs		12			22			12			24			12			24

Using the LCNRV rule, determine the proper unit value for balance sheet reporting purposes at December 31, 2017, for each of the inventory items above.

Item D			$
Item E			$
Item F			$
Item G			$
Item H			$
Item I			$

Answer 1

	Estimated selling price	Cost to complete	Selling costs	NRV	Cost	LCNRV
Item D	144	36	12	96	90	90
Item E	132	36	22	74	96	74
Item F	114	30	12	72	96	72
Item G	108	42	24	42	96	42
Item H	132	36	12	84	60	60
Item I	108	36	24	48	43	43
Note: NRV = Estimated selling price-Cost to complete-Selling costs