Almaden Hardware Store sells two product categories, tools and paint products. Information pertaining to its 2021 year-end inventory is as follows: Inventory,
by Product Category Quantity Per Unit Cost Net Realizable Value
Tools:
Hammers 120 $ 5.50 $ 6.00
Saws 250 10.50 9.50
Screwdrivers 350 2.50 3.10
Paint products:
1-gallon cans 550 6.50 5.50
Paint brushes 120 4.50 5.00
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.
Lower of cost and NRV
Net Realizable Value By Individual Products By Product Categories By Total Inventory
Product Cost
Tools:
Hammers
Saws
Screwdrivers
Total tools
Paint products:
1-gallon cans
Paint brushes
Total paint
Total
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.
(a) Individual products
(b) Product categories
(c) Total inventory