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 | 100 | | | $ | 5.90 | | | $ | 6.40 | |
| Saws | 290 | | | | 10.90 | | | | 9.90 | |
| Screwdrivers | 390 | | | | 2.90 | | | | 3.50 | |
| Paint products: | | | | | | | | | | |
| 1-gallon cans | 590 | | | | 6.90 | | | | 5.90 | |
| Paint brushes | 100 | | | | 4.90 | | | | 5.40 | |
|
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.
2. Assuming that the company reports an inventorywrite-down as a line item in the income statement, for each of theLCNRV applications determine the amount of the loss.
