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Home Furnishings reports inventory using the lower of cost and net realizable value (NRV). Below is information related to its year-end inventory. Inventory Quantity Unit Cost Unit NRV Furniture 120 $ 77 $ 92 Electronics 42 320 260 Exercise 6-13A Part 2 2. Calculate ending inventory using the lower of cost and net realizable value.

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TomShelby

Answer:

The ending inventory is 22,680 dollars using the lower of cost and net realizable value.

Explanation:

The company will follow the conservatism principle of accounting therefore; report his inventory at lowest value:

Furniture   120 units $ 77 each   =     9,240

Electronics 42 units $ 320 each =   13,440  

Total ending inventory:                 22,680

abiolataiwo2015

The ending inventory using the lower of cost and net realizable value is $20,160.

Ending inventory

Home furnishing lower of cost and net realizable value

Item              Quantity       Lower cost or NRV    Ending inventory

Furniture   120 units                   $ 77                             9,240

Electronics 42 units                    $ 260                        10,920

Ending inventory=$9,240+$10,920

Ending inventory=$20,160

Inconclusion the ending inventory using the lower of cost and net realizable value is $20,160.

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