Question

Waterway Inc. uses a perpetual inventory system. At January 1, 2020, inventory was $211,257,900 at both cost and realizable value. At December 31, 2020, the inventory was $286,249,300 at cost and $262,969,900 at realizable value.

Prepare the necessary December 31 entry under (a) the cost-of-goods-sold method (b) Loss method.

Answer 1

		Debit	Credit
a	Cost of good sold	23279400		=286249300-262969900
	Inventory		23279400
b	Loss Due to Decline of Inventory to NRV	23279400		=286249300-262969900
	Inventory		23279400

Answer 2

The answer from the other individual is correct, but the crediting entries are not. Try this: 
 
Entry (a):
Dr. Cost of Goods Sold........ 23,279,400
Cr. Aloowance to Reduce Inventory to NRV......... 23,279,400

Entry (b):
Dr. Loss Due to Decline of Inventory to NRV......... 23,279,400
Cr. Allowance to Reduce Inventory to NRV......... 23,279,400