Required: 1. Determine the carrying value of inventory at year-end, assuming the lower of cost or net realizable value (LCNRV) rule is applied to (a) individual products, (b) product categories, and (c) total inventory. 2. Assuming inventory write-downs are common for Almaden, record any necessary year-end adjustment amount for each of the LCNRV applications in requirement 1.

Question Completion:

Almaden Hardware Store sells two product categories, tools and paint products. Information pertaining to its 2018 year-end inventory is as follows:

Inventory, by                           Per Unit    Net Realizable

Product Category  Quantity     Cost              Value

Tools:

Hammers                  100         $5.00          $5.50

Saw                          200          10.00            9.00

Screwdrivers           300           2.00            2.60

Paint products:

1-gallon cans          500           6.00             5.00

Paint brushes         100            4.00            4.50

Required:

1. Determine the carrying value of inventory at year-end, assuming the lower of cost or net realizable value (LCNRV) rule is applied to (a) individual products, (b) product categories, and (c) total inventory.

2. Assuming inventory write-downs are common for Almaden, record any necessary year-end adjustment amount for each of the LCNRV applications in requirement 1.

1. The carrying value of inventory at year-end, assuming the lower of cost or net realizable value (LCNRV) rule is applied to

(a) individual products:

= $5,800

(b) product categories:

= $6,050

(c) total inventory:

= $6,080

2. Inventory write-down as a line item in the income statement, for each of the LCNRV applications for:

(a) individual products:

Debit Cost of goods sold $700

Credit Inventory $700

To record the inventory write down based on LCNRV.

(b) product categories:

Debit Cost of goods sold $450

Credit Inventory $450

To record the inventory write down based on LCNRV.

(c) total inventory:

Debit Cost of goods sold $420

Credit Inventory $420

To record the inventory write down based on LCNRV.

Explanation:

a) Data and Calculations:

Inventory, by                           Per Unit    Net Realizable  LCNRV  Inventory

Product Category  Quantity     Cost             Value                           Value

Tools:

Hammers                  100         $5.00          $5.50             $5.00       $500

Saw                          200          10.00            9.00               9.00        1,800

Screwdrivers           300           2.00            2.60                2.00         600

Paint products:

1-gallon cans          500           6.00             5.00               5.00      2,500

Paint brushes         100            4.00            4.50                4.00         400

Inventory amount (LCNRV rule applied to individual products)  $5,800

Inventory amount (LCNRV rule applied to product categories)

Tools: Cost value = (100 * $5) + (200 * $10) + (300 * $2) = $3,100

          NRV value = (100 * $5.50) + (200 * $9) + (300 * $2.60) = $3,130

LCNRV = $3,100 for tools

Paint products: Cost value = (500 * $6) + (100 * $4) = $3,400

                         NRV value =  (500 * $5) + (100 * $4.50) = $2,950

LCNRV = $2,950 for paint products

Total LCNRV = $6,050 ($3,100 + $2,950)

Inventory amount (LCNRV rule applied to total inventory):

Cost value = (100 * $5) + (200 * $10) + (300 * $2) + (500 * $6) + (100 * $4)

= $6,500

NRV value = (100 * $5.50) + (200 * $9) + (300 * $2.60) + (500 * $5) + (100 * $4.50) = $6,080

Year-end Adjustments for each of the LCNRV applications in requirement 1:

(a) individual products:

Cost of Inventory =   $6,500

LCNRV =                      5,800

Inventory write down  $700

(b) product categories:

Cost of Inventory =   $6,500

LCNRV =                      6,050

Inventory write down  $450

(c) total inventory:

Cost of Inventory =   $6,500

LCNRV =                      6,080

Inventory write down  $420

im confused need to go into details plz thx

answerjointly by the fed and by the behavior of individuals who hold money and of banks in which money is held;