Concord Specialty Company, a division of Lost World Inc., manufactures three models of gear shift components for bicycles that are sold to bicycle manufacturers, retailers, and catalog outlets. Since beginning operations in 1993, Concord has used normal absorption costing and has assumed a first-in, first-out cost flow in its perpetual inventory system. The balances of the inventory accounts at the end of Concord's fiscal year, November 30, 2020, are shown below. The inventories are stated at cost before any year-end adjustments. Finished goods Work in process Raw materials Factory supplies $626,700 108,600 285,300 63,600 The following information relates to Concord's inventory and operations. 1. The finished goods inventory consists of the items analyzed below. Cost NRV Down tube shifter $62,000 85,700 107,300 $61,500 80,100 109,300 250,900 255,000 Standard model Click adjustment model Deluxe model Total down tube shifters Bar end shifter Standard model Click adjustment model Total bar end shifters Head tube shifter 87,800 103,700 89,500 102,100 191,600 191,500 73,500 Standard model Click adjustment model Total head tube shifters 106,700 180,200 $626,700 73,200 109,200 182,400 $624,900 Total finished goods 2. 3. 4. 5. One-half of the head tube shifter finished goods inventory is held by catalog outlets on consignment. Three-quarters of the bar end shifter finished goods inventory has been pledged as collateral for a bank loan. One-half of the raw materials balance represents derailleurs acquired at a contracted price 20% above the current market price. The NRV of the rest of the raw materials is $117,000. The total NRV of the work in process inventory is $98,600. Included in the cost of factory supplies are obsolete items with an historical cost of $4,200. The market value of the remaining factory supplies is $60,500. Concord applies the LCNRV method to each of the three types of shifters in finished goods inventory. For each of the other three inventory accounts, Concord applies the LCNRV method to the total of each inventory account. Consider all amounts presented above to be material in relation to Concord's financial statements taken as a whole. 6. 7. 8. (a) Prepare the inventory section of Concord's balance sheet as of November 30, 2021. (Round answers to O decimal places, e.g. 2,556.) Concord Specialty Company Balance Sheet November 30, 2021 Current Assets Inventory Raw Materials 235875 Factory Supplies 59400 Work-in-Process 98600 Finished Goods 1067300 Total Inventories 1461175
