Almaden Hardware Store sells two product categories, tools andpaint products. Information pertaining to its 2018 year-endinventory is as follows:
Inventory,
by Product Category | Quantity | | Per Unit
Cost | | Net Realizable Value |
| Tools: | | | | | | | | | | |
| Hammers | 110 | | | $ | 5.70 | | | $ | 6.20 | |
| Saws | 270 | | | | 10.70 | | | | 9.70 | |
| Screwdrivers | 370 | | | | 2.70 | | | | 3.30 | |
| Paint products: | | | | | | | | | | |
| 1-gallon cans | 570 | | | | 6.70 | | | | 5.70 | |
| Paint brushes | 110 | | | | 4.70 | | | | 5.20 | |
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Required:
1. Determine the carrying value of inventory atyear-end, assuming the lower of cost or net realizable value(LCNRV) rule is applied to (a) individual products, (b) productcategories, and (c) total inventory.
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| | | | Lower of cost and NRV | | | Net | By | By | | | | Realizable | Individual | Product | By Total | | Product | Cost | Value | Products | Type | Inventory | | Tools: | | | | | | | Hammers | | | | | | | Saws | | | | | | | Screwdrivers | | | | | | | Total tools | $0 | $0 | | | | | Paint products: | | | | | | | 1-gallon cans | | | | | | | Paint brushes | | | | | | | Total paint | $0 | $0 | | | | | Total | $0 | $0 | $0 | $0 | |
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2.
Assuming that the company reports an inventory write-down as aline item in the income statement, for each of the LCNRVapplications determine the amount of the loss.
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| | | | | (a) | Individual products | | | (b) | Product categories | | | (c) | Total inventory | |
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