SLR Corporation has 1,100 units of each of its two products in its year-end inve

Question

SLR Corporation has 1,100 units of each of its two products in its year-end inventory. Per unit data for each of the products are as follows Cost Selling price Costs to sell Product 1 $ 52 Product 2 $ 35 37 75 Determine the book value of SLR's inventory assuming that the lower of cost and net realizable value rule is applied to individual products Per Unit Inventory Value ower of Cost and NRV Unit 1,100 1,100 Product Cost NRV Cost Cost Inventory value What is the before-tax income effect of the adjustment? Before-tax income effect

Explanation / Answer

NRV = MARKET VALUE OF THE INVENTORY - COST TO SELL

Before tax income will be reduced by 1100 due to the change in the cost of inventory

Product cost per unit NRV Lower of NRV and Cost units cost or NRV
which ever
is lower 1 52 72 52 1100 57200 2 35 34 34 1100 37400 94600

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.