Problem 9-2 (Part Level Submission) Marigold Home Improvement Company installs r

Question

Problem 9-2 (Part Level Submission) Marigold Home Improvement Company installs replacement siding, windows, and louvered glass doors for single-family homes and condominium complexes. The company is in the 7. Jim Alcide, controller for Marigold, has gathered the following data concerning inventory of preparing its annual financial statements for the fiscal year ended May 31, 201 At May 31, 2017, the balance in Marigold's Raw Materials Inventory account was $493,680, and Allowance to Reduce Inventory to summarized the relevant inventory cost and market data at May 31, 2017, in the schedule below Alcide assigned Patricia Devereaux, an intern from a local college, the task of calculating the am to each item in inventory. Devereaux expressed concern over departing from the historical cost principle. Net Realizable Value $67,760 102,608 203,643 169,400 $543,411 Cost Sales Price $77,440 Cedar shake siding 104,060 113,740 Louvered glass doors 135,520 225,544 Aluminum siding $84,700 Thermal windows 169,400 187,308 Total $493,680 $604,032 ? (a) Determine the proper balance in Allowance to Reduce Inventory to NRV at May 31, 2017, Balance in the Allowance to Reduce Inventory to NRV Click if you would like to Show Work for this question: Qen Show Work Attempts: 0 of 15 used

Explanation / Answer

SOLUTION

Allowance at May 31, 2017 = $18,392

Balance in allowance to reduce Invcentory to NRV-

Cost ($) Net Realizable Value (NRV) ($) Lower of Cost/ NRV ($) Aluminum siding 84,700 67,760 67,760 Cedar shake siding 104,060 102,608 102,608 Louvered glass doors 135,520 203,643 135,520 Thermal windows 169,400 169,400 169,400 Total 493,680 543,411 475,288

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