Blossom Company manufactures desks. Most of the company’s desks are standard mod
ID: 2529218 • Letter: B
Question
Blossom Company manufactures desks. Most of the company’s desks are standard models and are sold on the basis of catalog prices. At December 31, 2017, the following finished desks (10 desks in each category) appear in the company’s inventory.
Finished Desks
A
B
C
D
The 2017 catalog was in effect through November 2017, and the 2018 catalog is effective as of December 1; catalog prices are net of the usual discounts.
At what amount should each of the four desks appear in the company’s December 31, 2017, inventory, assuming that the company has adopted a lower-of-FIFO-cost-or-net realizable value (LCNRV) approach for valuation of inventories on an individual-item basis?
Finished Desks
A
B
C
D
2017 catalog selling price $655 $698 $1,310 $1,528 FIFO cost per inventory list 12/31/17 684 655 1,208 1,397 Estimated cost to complete and sell 73 87 116 189 2018 catalog selling price 728 786 1,310 1,746Explanation / Answer
Computation of Stock Valuation :-
Particulars A B C D a) No. of Finished Desks as on 31/12/17 10 10 10 10 b) FIFO Cost Per Inventory 684 655 1208 1397 c) 2018 Catalog Selling Price 728 786 1310 1746 d) Estimated Cost to Complete and Sale 73 87 116 189 e) Net Realizable Value (NRV) (c-d) 655 699 1194 1557 f) Lower of Cost of Finished (Stock or NRV) 655 655 1194 1397 g) Value of Stock (a * f) 6550 6550 11940 13970