When net realizable value is lower than cost, and the loss method applying the lower-of-cost-and-net-realizable approach...
When net realizable value is lower than cost, and the loss
method applying the lower-of-cost-and-net-realizable approach of
recording the write-down is used, what account is
credited?
A. Allowance to Reduce Inventory to NRV.
B. Inventory.
C. Cost of Goods Sold.
D. A loss account.
Homework Answers
Option A is correct i.e. Allowance to reduce inventory to NRV.
Reason:-
The entry would be :-
| Account Title and Explanation | Debit | Credit |
| Loss due to decline in NRV | xxx | |
| Allowance to reduce inventory to NRV | xxx |
Add Answer to:
When net realizable value is lower than cost, and the loss
method applying the lower-of-cost-and-net-realizable approach...
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QUESTION 1. Prepare the income statement to reflect lower of cost or net realizable value valuation...
QUESTION
1. Prepare the income statement to reflect
lower of cost or net realizable value valuation of the current year
ending inventory. Apply lower of cost or NRV on an item-by-item
basis. (Round your answers to nearest dollar
amount.)
2. Compare the lower of cost or net realizable
value effect on each amount that was changed on the income
statement in requirement (1). (Decreases should be
indicated by a minus sign.)(Round your answers to nearest dollar
amount.)
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QUESTION
1. Prepare the income statement to reflect
lower of cost or net realizable value valuation of the current year
ending inventory. Apply lower of cost or NRV on an item-by-item
basis. (Round your answers to nearest dollar
amount.)
2. Compare the lower of cost or net realizable
value effect on each amount that was changed on the income
statement in requirement (1). (Decreases should be
indicated by a minus sign.)(Round your answers to nearest dollar
amount.)
Jaffa Company prepared...
Problem 17.3A Applying the lower of cost or net realizable value rule by different methods. LO 17-3 This data is for selected Inventory items at Deluxe Supply Company Not Realizable Quantity Unit Cost Value CBOOK 46 20.50 20.00 Printer Cartridges Item 119 Item 120 Item 121 Fax Machines Item 210 25.00 88.00 11.00 227.00 Item 212 Required: 1&2. Determine the total amount to be reported as the inventory valuation at cost or net realizable value, whichever is lower, under lower...
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