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

Inventory, by Product CategoryQuantityPer Unit CostNet Realizable ValueTools: Hammers110$ 5.70$ 6.20Saws27010.709.70Screwdrivers3702.703.30Paint products: 1-gallon cans5706.705.70Paint brushes1104.705.20

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 Ace, record any necessary year-end adjusting entry for each of the LCNRV applications in requirement 1.

ProductCostNet Realizable ValueLower of cost and NRVBy Individual ProductsBy Product CategoriesBy Total InventoryTools: Hammers Saws Screwdrivers Total tools$0$0 Paint products: 1-gallon cans Paint brushes Total paint$0$0 Total$0$0$0$0

• Required 2

Assuming inventory write-downs are common for Ace, record any necessary year-end adjusting entry for each of the LCNRV applications in requirement 1. Note: Do not round intermediate calculations. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.

Show less

Journal entry worksheet

• Record the year-end adjustment for inventory assuming the lower of cost or net realizable value (LCNRV) rule is applied to individual products.

Note: Enter debits before credits.

TransactionGeneral JournalDebitCredit1

• Required 1
• Required 2