Newton labs leased chronometers from brookline instruments on january 1, 2018. brookline instruments manufactured the chronometers at a cost of $120,000. the chronometers have a fair value of $156,000. appropriate adjusting entries are made quarterly. (fv of $1, pv of $1, fva of $1, pva of $1, fvad of $1 and pvad of $1) (use appropriate factor(s) from the tables provided.) related information: lease term 5 years (20 quarterly periods) quarterly lease payments $8,730 at jan. 1, 2018, and at mar. 31, june 30, sept. 30, and dec. 31 thereafter. economic life of asset 6 years estimated residual value of chronometers at end of lease term $6,738 interest rate charged by the lessor 8% required: 1. prepare appropriate entries for newton labs to record the arrangement at its commencement, january 1, 2018, and on march 31, 2018. 2. prepare appropriate entries for brookline instruments to record the arrangement at its commencement, january 1, 2018, and on march 31, 2018.

Example1 lcnrv: ted company uses the lower of cost or nrv method in valuing its inventory items. the inventory at december 31, 2017, consists of products a, b and c, each having 1,000 units. relevant unit data for these products appear below: item a item b item c cost $ 80 $80 $80 estimated selling price 180 100 90 estimated selling cost 30 30 30 required: using the lower of cost or net realizable value rule, determine the proper value of inventory for balance sheet reporting purposes at december 31, 2017. prepare any necessary journal entry. apply the lower of cost or nrv method: • on an individual inventory basis; • on a group basis; • on a total inventory basis. solution worksheet: inventory (on an individual basis): inventory value item nrv cost lc- item a item b item c total inventory (on a group basis): inventory value item nrv cost lc- group 1 (item a and b) group 2 (item c) total inventory (on an aggregate inventory basis): inventory value item nrv cost lc- total inv