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Problem 12-2 To 6

The document shows a table with 4 products listing their estimated selling price, cost to dispose, net realizable value, and LCNRV. Product 1 has an estimated selling price of $800, cost to dispose of $150, and net realizable value of $650 which matches the LCNRV. Product 2 has an estimated selling price of $950, cost to dispose of $205, and net realizable value of $745 which matches the LCNRV of $475. Product 3 and 4 are similarly summarized. The document provides key financial information about 4 products' estimated sales prices, disposal costs, net realizable values, and lowest levels under the net realizable value model.

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MYCO PONCE PAQUE
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2K views3 pages

Problem 12-2 To 6

The document shows a table with 4 products listing their estimated selling price, cost to dispose, net realizable value, and LCNRV. Product 1 has an estimated selling price of $800, cost to dispose of $150, and net realizable value of $650 which matches the LCNRV. Product 2 has an estimated selling price of $950, cost to dispose of $205, and net realizable value of $745 which matches the LCNRV of $475. Product 3 and 4 are similarly summarized. The document provides key financial information about 4 products' estimated sales prices, disposal costs, net realizable values, and lowest levels under the net realizable value model.

Uploaded by

MYCO PONCE PAQUE
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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PRODUCT COST 

ESTIMATED SELLING COST TO NET REALIZABLE LCNRV


PRICE (A)  DISPOSE (B) VALUE (A-B)

1 700 800 150 650 650

2 475 950 205 745 475

3 255 300 50 250 250

4 450 1000 260 740 450

Myco Ponce B. Paque


BSA – MA11

Problem 12- 2 AICPA ADAPTED


ANSWER:

Problem 12 – 4 AICPA ADAPTED


ANSWER: A. 7,625,000
B. 7,725,000
C. 7,875,000

CATEGORY UNITS COST TOTAL SELLING SELLING NET TOTAL NET LCNRV
1 (A) (B) COST PRICE COST (D) REALIZABLE REALIZABLE
(A*B) [C] VALUE (C-D) VALUE
(NRV*A)

A 25,000 105 2,625,000 130 15 115 2,875,000 2,625,00


0

B 20,000 85 1,700,000 90 10 80 1,600,000 1,600,00


0

CATEGORY                
2

A 40,000 50 2,000,000 45 5 40 1,600,000 1,600,00


0

B 30,000 65 1,950,000 75 15 60 1,800,000 1,800,00


0

TOTAL               7,625,00
0
A.

B.
CATEGORY UNITS COST TOTAL SELLING SELLING NET TOTAL NET LCNRV
1 (A) (B) COST PRICE COST (D) REALIZABLE REALIZABLE
(A*B) [C] VALUE (C-D) VALUE
(NRV*A)

A 25,000 105 2,625,000 130 15 115 2,875,000  

B 20,000 85 1,700,000 90 10 80 1,600,000  

TOTAL     4,325,000       4,475,000 4,325,00


0

                 

CATEGORY                
2

A 40,000 50 2,000,000 45 5 40 1,600,000  

B 30,000 65 1,950,000 75 15 60 1,800,000  

TOTAL     3,950,000       3,400,000 3,400,00


0

                 

TOTAL               7,725,00
0

C.

CATEGORY UNITS COST TOTAL SELLING SELLING NET TOTAL NET LCNRV
1 (A) (B) COST PRICE COST (D) REALIZABLE REALIZABLE
(A*B) [C] VALUE (C-D) VALUE
(NRV*A)

A 25,000 105 2,625,000 130 15 115 2,875,000  

B 20,000 85 1,700,000 90 10 80 1,600,000  

CATEGORY                
2

A 40,000 50 2,000,000 45 5 40 1,600,000  


B 30,000 65 1,950,000 75 15 60 1,800,000  

TOTAL     8,275,000       7,875,000 7,875,00


0

Problem 12 – 6 AICPA ADAPTED


ANSWERS:

A. No adjustment
B. No adjustment necessary
C. Loss on purchase commitment ( 10,000 x 30 ) 300,000
Estimated liability for purchase commitment 300,000
D. December 31, 2019
Loss on Purchase commitment 300,000
Estimated liability for purchase commitment 300,000

January 31, 2020


Purchase ( 100k x 150 ) ---- ----- ----- ----- 1,500, 000
Loss on purchase commitment ----- ----- ----- 200,000
Estimated liability for purchase commitment ----- 300,000
Accounts Payable ----- ----- ---- 2,000,000

E. December 31, 2019


Loss on purchase commitment ----- ----- 300,000
Estimated liability for purchase commitment ----- ----- 300,000

January 31, 2020


Purchase ----- ----- ----- ---- ---- ---- 200,000,000
Estimated liability for purchase commitment ---- 300,000
Accounts payable ---- ---- ---- ---- 200,000,000
Cash on purchase commitment ---- ---- ---- 300,000

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