The controller of Cox Company is applying the Lower of Cost and Net Realizable Value to its ending i

 
   

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The controller of Cox Company is applying the Lower of Cost and Net Realizable Value to its ending inventory. The following information is available:

                                                                                                 Cost                 NRV

Lawnmowers:

                                      Self-propelled                 $14,800            $17,000

                                              Push type                   19,000              18,000

                                                     Total                   33,800              35,000

Snowblowers:

                                                 Manual                   29,800            31,000

                                               Self-start                   19,000              21,000

                                                     Total                   48,800              52,000

                                     Total inventory                 $82,600            $87,000

A) Compute the value of the ending inventory by applying the Lower of Cost and Net Realizable Value.

LCNRV Applies

Description

Category

Cost

NRV

Individual

Category

Total

Self-propelled

Lawnmowers

Push type

Lawnmowers

Total Lawnmowers

Manual

Snowblower

Self-start

Snowblower

Total Snowblowers

Total

B) Prepare the adjusting entry, if required, if LCNRV was applied using individual products

General Journal                                                                                                                                                        G1

Date

Account Title and Explanation

Ref.

Debit

Credit