Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

1. Introduction to Accounting

Sample Financial Statements - Coca Cola

Financial Accounting

1. Introduction to Accounting

Sample Financial Statements - Coca Cola

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Multiple Choice

Martinez Company's ending inventory includes the following items:- Item A: $5,000 (cost), $4,500 (net realizable value)- Item B: $3,000 (cost), $3,200 (net realizable value)- Item C: $2,500 (cost), $2,000 (net realizable value)Using the lower of cost or net realizable value (LCNRV) rule applied item by item, what is the total value of ending inventory reported on the balance sheet?

$9,500

$10,700

$10,000

$10,500

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Verified step by step guidance

Step 1: Understand the lower of cost or net realizable value (LCNRV) rule. This rule states that inventory should be reported at the lower value between its cost and its net realizable value (NRV) for each item individually.

Step 2: Compare the cost and net realizable value for each item. For Item A, compare $5,000 (cost) and $4,500 (NRV). For Item B, compare $3,000 (cost) and $3,200 (NRV). For Item C, compare $2,500 (cost) and $2,000 (NRV).

Step 3: Select the lower value for each item based on the LCNRV rule. For Item A, the lower value is $4,500. For Item B, the lower value is $3,000. For Item C, the lower value is $2,000.

Step 4: Add the selected lower values for all items to calculate the total value of ending inventory. Use the formula: $ \text{Total Inventory Value} = \text{Lower Value of Item A} + \text{Lower Value of Item B} + \text{Lower Value of Item C} $.

Step 5: Report the total value of ending inventory on the balance sheet. This value represents the sum of the lower values determined for each item.