ACC 3010 – Intermediate Accounting I
You must include all supporting calculations with your solutions and these supporting calculations must be prepared with an Excel spreadsheet. You must submit one printed copy of the Excel spreadsheet which contains your case solution and a second printed copy displaying the formulas contained in each cell of your spreadsheet.
Excel Case #2
Raider Industries must follow the Lower of Cost or Net Realizable Value (LCNRV) Rule for its inventory. The following information was taken from Raider’s inventory records as of December 31, 2018:
Selling
Product ID Quantity Cost Price
Number on Hand per Unit per Unit
Item #101 8,000 $ 120.00 $ 110.00
Item #102 6,500 24.00 30.00
Item #103 12,000 14.00 16.00
Item #104 5,400 8.00 12.00
Item #105 1,000 150.00 160.00
Item #201 1,200 160.00 180.00
Item #202 3,000 10.00 11.00
Item #203 8,000 32.00 34.00
Raider has the following costs to sell associated with all of its products:
1. Sales commission of 10% of the selling price for each product
2. Packaging and delivery costs of 5% of the cost of each product
Requirements:
Complete each of the following independent requirements:
a) Determine the carrying value of inventory at 12/31/18 assuming that Raider applies the LCNRV Rule to each specific product in its inventory. Also, assuming that Raider would record any loss recognized as a separate line item in its income statement, determine the amount of the loss (if any) that Raider would record for 2018.
b) Determine the carrying value of inventory at 12/31/18 assuming that Raider applies the LCNRV Rule to its total inventory. Also, assuming that Raider would record any loss recognized as a separate line item in its income statement, determine the amount of the loss (if any) that Raider would record for 2018.
