Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Bonita Home Improvement Company installs replacement siding, windows, and louvered glass doors for single-family homes and condominium complexes. The company is in the process of

Bonita Home Improvement Company installs replacement siding, windows, and louvered glass doors for single-family homes and condominium complexes. The company is in the process of preparing its annual financial statements for the fiscal year ended May 31, 2017. Jim Alcide, controller for Bonita, has gathered the following data concerning inventory. At May 31, 2017, the balance in Bonitas Raw Materials Inventory account was $420,240, and Allowance to Reduce Inventory to Market had a credit balance of $27,400. Alcide summarized the relevant inventory cost and market data at May 31, 2017, in the schedule below. Alcide assigned Patricia Devereaux, an intern from a local college, the task of calculating the amount that should appear on Bonitas May 31, 2017, financial statements for inventory under LCNRV rule as applied to each item in inventory. Devereaux expressed concern over departing from the historical cost principle.

COST. SALES PRICE. NET REALIZABLE VALUE Aluminum siding $72,100 $65,920 $57,680 Cedar shake siding $88,580. $96,820. $87,344 Louvered glass doors. $115,360. $191,992. $173,349 Thermal windows. $144,200. $159,444. $144,200 Total. $420, 240. $514,176. $462,573

determine the proper balance in allowance to reduce inventory to NRV May 31, 2017.

balnce in the allowance to reduce inventory to NRV:

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Fundamentals Of Cost Accounting

Authors: William Lanen

7th Edition

1264100841, 9781264100842

More Books

Students also viewed these Accounting questions