Answer:
Ending Inventory Net Realisable Value or LCM is $ 14,000
Net Income Net Realisable Value or LCM is $ 11,900
Explanation:
Purchase Cost Replacement Cost per
Item Quantity Per Unit Total Unit Total Cost NRV
A 1,500 $ 3 4,500 $ 4 $ 4500 $4500
B 750 4 3,000 2 $1500 $ 1500
C 3,500 2 7,000 1 $3500 $ 3500
<u>D 1,500 5 7,500 3 $ 4500 </u><u> $ 4500 </u>
$ 14000
Ending Inventory $ 22,000
Income Statement
Sales Revenue $ 140,000
Cost of Goods Sold
Beginning Inventory $ 15,000
Purchases 91,000 Goods
Available for Sale 106,000
Ending Inventory 14,000 Applying LCM/NRV
Cost of Goods Sold 92,000
Gross Profit 48,000
Operating Expenses 31,000
Income from Operations 17,000
Income Tax Expense (30%) 5,100
Net Income $ 11,900
