Lower of Cost and Net Realizable Value (NRV)
the December

question 54

Essay

Lower of cost and net realizable value (NRV)
The December 31, 2020, inventory of Rhode Inc. consisted of four products, for which certain information is provided below:
$$\begin{array} { c c c c c } && \text { Replacement }& \text { Estimated }&\text { Expected } \\\text { Product } & \text { Original Cost } &\text {Cost} &\text { Disposal cost } & \text { Selling Price } \\\text { A } & \$ 29.00 & \$ 22.00 & \$ 6.50 &\$ 40.00 \\\text { B } & \$ 44.00 & \$ 40.00 &\$8.00 &\$48.00 \\\text { C } & \$ 145.00 & \$ 125.00 & \$ 25.00 & \$ 190.00 \\\text { D } & \$ 21.00 & \$ 15.80 & \$ 3.00 & \$ 28.00\end{array}$$ Instructions
Using the lower of cost and NRV approach applied on an individual-item basis, calculate the inventory valuation that should be reported for each product on December 31, 2020.

---

Definitions:

Socialization

Learning from parents and others what is desirable and undesirable conduct in a particular culture.

Desirable Behavior

Actions or conduct that are considered appropriate, beneficial, or valued within a specific context or by society at large.

Social Cues

Nonverbal or environmental signals that guide social interactions by influencing one's behavior in the presence of others.

Natural Selection

The process by which biological traits become either more or less common in a population due to the effect on the survival and reproduction of organisms.