Question
Scott's Sporting Stores Inc. reported the following cost and net realizable value information for inventory at December 31: Item Units Unit Cost Unit NRV Skates:
Scott's Sporting Stores Inc. reported the following cost and net realizable value information for inventory at December 31:
| Item | Units | Unit Cost | Unit NRV |
|---|---|---|---|
| Skates: |
|
|
|
| Bauer | 13 | $259 | $400 |
| CCM | 10 | $412 | $350 |
| Running shoes: |
|
|
|
| Adidas | 5 | $120 | $120 |
| Nike | 8 | $117 | $110 |
Required
a.
Calculate the ending inventory balance for skates and running shoes using the lower of cost and net realizable value for each item.
b.
Calculate the ending inventory balance for skates and running shoes using the historical unit costs provided.
c.
Compare the difference in the ending inventory amounts. Which amount provides a more faithful representation of the inventory value?
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Financial Accounting Reporting Analysis And Decision Making
Authors: Shirley Carlon, Rosina Mladenovic Mcalpine, Chrisann Palm, Lorena Mitrione, Ngaire Kirk, Lily Wong
5th Edition
0730313743, 978-0730313748
