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(Solved): Creative Technology reports inventory using the lower of cost and net realizable value (NRV). Below ...
Creative Technology reports inventory using the lower of cost and net realizable value (NRV). Below is information related to its year-end inventory.
| Inventory | Quantity | Unit Cost | Unit NRV |
|---|---|---|---|
| Optima cameras | 100 | $49 | $79 |
| Inspire speakers | 40 | 59 | 49 |
Calculate the total amount to be reported for ending inventory in the balance sheet.
\begin{tabular}{|l|r|c|rr|} \hline \multicolumn{1}{|c|}{ Inventory } & \multicolumn{2}{|c|}{ Quantity } & Lower of Cost and NRV per unit & \multicolumn{2}{|c|}{ Ending Inventory } \\ \hline Optima camera & 100 & & \( \$ \) & 0 \\ \hline Inspire speakers & 40 & & \( \$ \) & 0 \\ \hline & & & & 0 \\ \hline \end{tabular}
Expert Answer
Inventories are Usually Valued at Lower of Cost or NET Realisable Value (NRV) as per IAS 2. Cost of Inventory can be calculated using FIFO, LIFO, Weighted Average Method etc. However, in the