Question #1 Lower of Cost or Net Realizable Value (LCNRV) and Lower of Cost or Market (LCM) Rules/Methods Vargas Company has the following items as inventory as of August 31, 2020. Completion & Disposal Cost Item Units 500 $3 300 8 Current Estimated Cost Replacement Cost Selling Price $65 $68 $80 80 72 102 90 105 112 38 42 40 20 21 30 70 45 67 1 2 3 4 5 6 10 4 400 700 900 600 2 2 For all of the above inventory items, the Normal Profit Margin is 30% of cost. Determine the value of the inventory of each item by applying: a) Lower of Cost or Net Realizable Value (LCNRV). Calculate the loss, if any? b) Lower of Cost of Market (LCM). Calculate the loss, if any? c) Prepare the journal entry to record any loss for requiremnts (a) and (b)? Question #1 Lower of Cost or Net Realizable Value (LCNRV) and Lower of Cost or Market (LCM) Rules/Methods Vargas Company has the following items as inventory as of August 31, 2020. Completion & Disposal Cost Item Units 500 $3 300 8 Current Estimated Cost Replacement Cost Selling Price $65 $68 $80 80 72 102 90 105 112 38 42 40 20 21 30 70 45 67 1 2 3 4 5 6 10 4 400 700 900 600 2 2 For all of the above inventory items, the Normal Profit Margin is 30% of cost. Determine the value of the inventory of each item by applying: a) Lower of Cost or Net Realizable Value (LCNRV). Calculate the loss, if any? b) Lower of Cost of Market (LCM). Calculate the loss, if any? c) Prepare the journal entry to record any loss for requiremnts (a) and (b)