Question

Exercise 9-8 Sheffield Company began operations in 2016 and determined its ending inventory at cost and at lower-of-UFO cost-or-market at December 31, 2016, and December 31, 2017. This information is presented below: 12/31/16 12/31/17 Cost $375,880 386,720 Lower-of-Cost-or-Market $357,400 371,940 (a) Prepare the journal entries required at December 31, 2016, and December 31, 2017, assuming that the inventory is recorded at market, and a perpetua Inventory system (cost-of-goods-sold method) is used. (Credit account ttles are automatically Indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter for the amounts.) Date Account Titles and Explanation Debit Credit 12/31/16 12/31/17 (b) Prepare journal entries required at December 31, 2016, and December 31, 2017, assuming that the inventory is recorded at market under a perpetual system (loss method is used). (Credit account tities are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter o for the amounts.) Date Account Tities and Explanation Debit Credit 12/31/16

Answer 1

Date AccoundTlalanat 1a/ayCasl of good sold Debt f 18480 Allowanee to udte trmendanyto mackel 18480 3/31/ Alowanee to Redure invendany to marcket Cost of goods eale 3700 3700 Dade AccaundTlaıplqadeon|_Debef - ta/31/ ess due-to market declne onvenony Alowante to neduce inveriony to markel fa/31/17 Alowane do Radure invend ony to market 3100 es due to maxkel dechm of menfony Cuedi! 18480 3700 Both method have the same

Eylanation Cast ofinvenlany a 1/fy 16 Lower of cast or market ad 13/31/14= 9(3S 74 O0) Allowanee amoun nesded to, tedune invendoy do markele)- 18480 Col of tnentoy a 375880 d 1/31 17 hower of tost on mankel A llowans amound needed to reduce invetony to maxked (b) 386 720 1a/31/17 (371140) $ J480 Recorenyfpiouly ogorzed los (a) 14780 P18480 3700