Question

Presented below is information related to Waterway Inc.’s inventory. (per unit) Skis Boots Parkas Historical cost $370.50 $206.70 $103.35 Selling price 413.40 282.75 143.81 Cost to sell 37.05 15.60 4.88 Cost to complete 62.40 56.55 41.44 Determine the following: the net realizable value for each item, and the carrying value of each item under LCNRV.

Answer 1

Answer:

(1) $313.95; $313.95

(2) $210.6; $206.70

(3) $97.49; $97.49

Explanation:

Skis:

Net realizable value = selling price - cost to sell - cost to complete      

                                  = 413.40 - 37.05 - 62.40

                                  = $313.95

Historical cost = $370.50

LCNRV = lower of historical cost or net realizable value

             = $313.95

Boots:

Net realizable value = selling price - cost to sell - cost to complete      

                                  = 282.75 - 15.60 - 56.55

                                  = $210.6

Historical cost = $206.70

LCNRV = lower of historical cost or net realizable value

             = $206.70

Parkas:

Net realizable value = selling price - cost to sell - cost to complete      

                                  = 143.81 - 4.88 - 41.44

                                  = $97.49

Historical cost = $103.35

LCNRV = lower of historical cost or net realizable value

             = $97.49