Question
Jones Corporation has the following information of inventory at 12/31/2017 This is the first business year of the company. Jones Corporation uses the Lower-of-Cost-or-Market (LCM)
Jones Corporation has the following information of inventory at 12/31/2017 This is the first business year of the company.
Jones Corporation uses the Lower-of-Cost-or-Market (LCM) method, on an individual-item basis, in pricing its inventory items. The inventory at December 31, 2017, consists of products G, H, I, J, K, L, M and N. Relevant per unit data for these products appear below.
Item No. | Cost per unit | Cost to Replace | Estimated Selling Price | Cost of Completion and Disposal | Normal Profit margin (%) of selling price |
X | 3.63 | 3.34 | 4.8 | 1.94 | 18% |
Compute Net Realizable Value (NRV), NRV - normal profit (show your detail calculation), and use the LCM rule, determine the proper unit value for balance sheet reporting purposes at December 31, 2017
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