Data related to the inventories of Alpine Ski Equipment and Supplies is presented below:
In applying the LCM rule, the inventory of skis would be valued at:
Solution
Solution :
Answer is a ) $ 130,000
Explanation :
Expected selling price of Skis : - $ 169,000.
Less : Sales commision : - $ 16,900
----------------------------------------------------------------
Net realizable value = CEILING = $ 152,100
----------------------------------------------------------------
Net realizable value minus the normal profit:-
Net realizable value :- $ 152,100
Less : Normal profit : 20% of sellling price :- $ 33,800
----------------------------------------------------------------------
NRV - Normal profit (FLOOR) = $ 118,300
------------------------------------------------------------------------
NRV CEILING : $ 152,100
NRV FLOOR : $ 118,300
REPLACEMENT COST : 130,000
The replacement cost is between the ceiling and the floor , therefore the inventory of skis would be valued at REPLACEMENT COST : 130,000Â Â .
.
Basic Civil Engineering first year Notes- Chapter 4 Building.pptx
Data related to the inventories of Alpine Ski Equipment and Supplies i.docx
1. Data related to the inventories of Alpine Ski Equipment and Supplies is presented below:
In applying the LCM rule, the inventory of skis would be valued at:
Data related to the inventories of Alpine Ski Equipment and Supplies is presented below:
Solution
Solution :
Answer is a ) $ 130,000
Explanation :
Expected selling price of Skis : - $ 169,000.
Less : Sales commision : - $ 16,900
----------------------------------------------------------------
Net realizable value = CEILING = $ 152,100
----------------------------------------------------------------
Net realizable value minus the normal profit:-
Net realizable value :- $ 152,100
Less : Normal profit : 20% of sellling price :- $ 33,800
----------------------------------------------------------------------
NRV - Normal profit (FLOOR) = $ 118,300
------------------------------------------------------------------------
2. NRV CEILING : $ 152,100
NRV FLOOR : $ 118,300
REPLACEMENT COST : 130,000
The replacement cost is between the ceiling and the floor , therefore the inventory of skis would
be valued at REPLACEMENT COST : 130,000Â Â .
