AP7-10B

(Lower of cost and net realizable value)

T2T Hockey Inc. has the largest selection of hockey equipment of any retailer in the city in which it operates. T2T reported the following cost and net realizable value information for inventory at December 31:

Item	(Units)	(Unit Cost)	(Unit NRV)
Hockey sticks:
Bauer	23	$95	$200
CCM	13	$200	$150
Warrior	57	$250	$250
Helmets:
Adidas	11	$190	$125
Nike	10	$175	$175
Mission	25	$75	$200

Required

a.

Calculate the ending inventory balance for hockey sticks and helmets using the lower of cost and net realizable value for each item.

b.

Calculate the ending inventory balance for hockey sticks and helmets using the historical unit costs provided.

c.

Compare the difference in the ending inventory amounts. Which amount provides a more faithful representation of the inventory value? Explain.