Question Details

Using the lower-of-cost-or-net realizable value approach 



Ex. 1—Lower-of-cost-or-net realizable value.
The December 31, 2010 inventory of Gwynn Company consisted of four products, for which certain information is provided below.
			Estimated	Expected	Estimated
	Product	Original Cost		Completion Cost	Selling Price	Cost to sell
	A	$25	$6	$40	$4
	B	$42	$12	$58	$8
	C	$120	$25	$150	$15
	D	$18	$3	$26	$2

Instructions
Using the lower-of-cost-or-net realizable value approach applied on an individual-item basis, compute the inventory valuation that should be reported for each product on December 31, 2010.

Ex. 2—LCNRV
Pinkel Company uses the LCNRV method, on an individual-item basis, in pricing its inventory items. The inventory at December 31, 2011, consists of products D,E,F,G,H, and I, Relavant per-unit data for these products appear below.
		Item	Item	Item	Item	Item	  Item
			   D   	   E   	   F   	   G   	   H   	      I    	
Estimated selling price	€180	€165	€140	€135	€165	€135
Cost		110	120	120	120	75	    54
Cost to complete	45	45	35	50	45	    45
Selling costs		15	27	15	30	15	    30

Instructions
Using the LCNRV rule, determine the proper unit value for statement of financial position reporting purposes at December 31, 2011, for each of the inventory items above.




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