Question
Decker Company has five products in its inventory. Information about the December 31, 2021, inventory follows. Product Quantity Unit Cost Unit Selling Price A 1,150
Decker Company has five products in its inventory. Information about the December 31, 2021, inventory follows.
| Product | Quantity | Unit Cost | Unit Selling Price | ||||||||||
| A | 1,150 | $ | 13 | $ | 20 | ||||||||
| B | 950 | 19 | 20 | ||||||||||
| C | 800 | 4 | 8 | ||||||||||
| D | 400 | 7 | 6 | ||||||||||
| E | 800 | 16 | 14 | ||||||||||
The cost to sell for each product consists of a 15 percent sales commission. Required: 1. Determine the carrying value of inventory at December 31, 2021, assuming the lower of cost or net realizable value (LCNRV) rule is applied to individual products. 2. Determine the carrying value of inventory at December 31, 2021, assuming the LCNRV rule is applied to the entire inventory. 3. Assuming inventory write-downs are common for Decker, record any necessary year-end adjusting entry based on the amount calculated in requirement 2.
Decker Company has five products in its inventory. Information about the December 31, 2021, inventory follows.
| Product | Quantity | Unit Cost | Unit Selling Price | ||||||||||
| A | 1,150 | $ | 13 | $ | 20 | ||||||||
| B | 950 | 19 | 20 | ||||||||||
| C | 800 | 4 | 8 | ||||||||||
| D | 400 | 7 | 6 | ||||||||||
| E | 800 | 16 | 14 | ||||||||||
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Auditing Cases An Interactive Learning Approach
Authors: Mark S. Beasley, Frank A. Buckless, Steven M. Glover, Douglas F. Prawitt
3rd Edition
0131494910, 9780131494916
